Millions are saving nothing for the future
Although 63% of Brits do manage to put some money aside, 32% have a total pot of less than £1,000, which according to Scottish Widows, is less than the UK average combined mortgage and council tax costs (£1009).
Iain McGowan, head of savings and investments at Scottish Widows, said: “People clearly recognise the importance of saving something towards their future financial wellbeing, which is encouraging.
“The importance of building a safety net for themselves and their families is a priority, with 63% of people reporting that they managed to save some money in the last 12 months.
“However, just a quarter of those people believed they were saving enough to meet their long-term needs; with a further 37% saying they would definitely not be achieving this goal.
“When we are faced with immediate financial commitments, such as mortgage payments and day to day living expenses, then it is absolutely necessary to give these pressing needs priority.
“However, taking a wholly short-term view of our finances will mean we are unprepared for the financial needs and challenges that lie ahead in the future.”
A quarter said that they had loaned out a ‘substantial amount’ to their children, often just to help them cope with daily living costs.
Scottish Widows says that this level of financial help is having a huge negative impact on parents’ finances, as it leaves them without savings to cushion themselves against emergencies.
This comes after a report by Lloyds TSB highlighted consumers began 2013 with a further squeeze on their household budgets.
Weak income growth year-on-year forced a decline of 1.4% in spending power growth if you take into account the effects of inflation, meaning consumers had the equivalent of approximately £13 less a month to spend on non-essential items.
The majority of people say that having no money available is a major barrier to saving, while one in five are seriously concerned about job security for the coming year.
The wider economic climate is also increasing the pressure on those struggling to save. 30% of people report that they have been forced to cut back on their savings by rising costs, whilst a further 27% are saving less than two years ago, principally due to a lower level of disposable income.
source: Scottish Widows