More than 6.5 million households across Britain are in debt or face the prospect of falling into debt within a month should they lose their jobs or face a large financial shock, according to analysis from a charity.
The Equality Trust found 42% of non-retired households have less put aside than would be needed to cover the average month's worth of household bills at £2,125.20.
Some 5.5 million households across Britain owe more in debt than they have saved, according to the findings.
The trust said many families are also vulnerable to one-off financial shocks. Over a quarter (28%) of non-retired households have too little saved to pay the £540 typically needed for a boiler to be replaced.
The trust made the findings after analysing Office for National Statistics (ONS) figures.
It has urged the Government to scrap plans to introduce a Lifetime Isa next year and instead use the funding to boost the Help to Save scheme, which aims to encourage low-paid workers to build up a rainy day fund.
Help to Save accounts will be available no later than April 2018 under the Government's plans. They will be will open to millions of employees who receive in-work benefits.
Lifetime Isa accounts will be available from April 2017 and will boost the savings of people, aged between 18 and 40, who are saving for their first home or their retirement.
The trust claimed current policies favour those who are already well off by offering tax efficient savings through Isas, and bonuses through the new Lifetime Isa.
Executive Director of the Equality Trust, Dr Wanda Wyporska, said: "The Government must change direction and offer greater support for its Help to Save scheme, rather than projects such as the Lifetime Isa.