Alarming savings trend as number of savers falls, bank says Go compare with our comparison table

Alarming savings trend as number of savers falls, bank says

03 March 2011 / by Paul Dicken

The number of people not keeping savings has increased by 16 per cent since 2009, with one in three adults failing to save anything at all, a survey has found.

The Scottish Widows Savings and Investment Report revealed that the greatest number of non-savers were middle aged, with middle income earners citing not having enough money as a barrier, due to living costs.

In the fifth annual report of its kind, Scottish Widows said around 18 million adults were not putting aside savings, equating to around 8million more people unable to save, or spending their money elsewhere, compared to 2009.

Scottish Widows said this was an ‘alarming trend’ with increasing financial burdens for people, including rising unemployment, inflation and student fees.

Reflecting the difficulties people face buying property, the report said the average age of first time buyers could rise from 30 to 44 as a result of a lack of savings for a deposit on a home.

Drawing on the findings of a five year study, the report predicts a ‘widespread future struggle’ for people to afford not only house deposits, but student fees and long term care.

Head of savings and investments at Scottish Widows, Ian McGowan, said: “It is unsurprising that the financial crisis has impacted upon people’s savings behaviours, but the concern is that this has created a generation of people who simply do not save. It is vital that this new group of non-savers are made aware of the serious impact that this could have on their quality of life.”

Scottish Widows said adults aged 45 to 54 are struggling to save more than any other age group, with the highest incidence of non-savers in this age group. The report identified a number of financial demands being placed on them by children and ageing parents, which would be difficult to meet without savings.

McGowan said: “It is clear that the benefits of saving, even very small amounts, are not getting through to an increasing number of people. We know it is not practical for people today to put aside huge amounts of money, but even still it is critically important that saving does not become a lost art.”

The survey for the 2011 report was carried out in December 2010, with over 5000 adults interviewed.

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