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Savings failings almost double

18 March 2010 / by Andy Davies

The number of Brits who are currently saving nothing at all has almost doubled in the past year, a new report by Scottish Widows has claimed.

According to its annual Savings and Investments Report, 37 per cent of Brits are currently not putting aside any of their earnings into savings – a marked increase on last year when the figure stood at 20 per cent.

Meanwhile, of those who are making an attempt to save, two in five believe they are definitely not saving enough for the long-term, with Scottish Widows suggesting that this figure could be higher in reality as people "consistently underestimate how much they should be saving".

Encouragingly, the report has revealed that more than half of savers – 56 per cent – had met or exceeded their savings goals in the past year, with a further 14 per cent narrowly missing them. However, the report has also found that savings goals are often set too low, which could mean that many savers will face disappointment in the future.

Welcoming the report's findings with caution, Iain McGowan, savings expert at Scottish Widows said: "While it is encouraging that many people have met or exceeded their savings goals, the proportion of people saving nothing has doubled from the previous year, highlighting how much still needs to be done to get the nation saving."

In the past 12 months, the average amount saved by people has fallen from just under £3,500 in 2009 to around £2,600 this year, with two thirds of people citing a lack of money as the "major barrier" to saving.

Of those who are struggling to save, 68 per cent attributed daily living costs as a key factor to preventing them from saving, while just over a third said they were concentrating on paying off their debts rather than saving.

Commenting, Mr McGowan said: "The downturn of the last two years has adversely affected the finances of many households whether through reduced earnings, increased everyday expenses or debt repayment. This all means that people have had to work harder than ever to put money aside for the future."

In a bid to get more people saving, Mr McGowan is calling on the Government to introduce more incentives for savers like the tax-wrappers seen on ISAs.

"We believe that concerted effort by the Government to promote the existing range of savings schemes and to consider further incentives could make a real difference in encouraging more people to save when they can," he said.

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