The tough economic situation for many families means few are managing to put away anything in savings. Many are simply needing to support themselves and other family members in hard times. It’s a case of won’t save, can’t save.
According to the recently published seventh annual Savings and Investment report by Scottish Widows, 31% in a survey of over 5,000 people are currently not saving anything at all.
In the survey, 32% of people who are managing to add to their nest eggs said they had less than £1,000 put away – not even enough to pay someone’s average mortgage and council tax costs for a month. A quarter of the people surveyed, who have families, said they had given loans to their children.
Parents said that they had handed out loans averaging £15,000 to help their sons and daughters buy their first home or go to university and 25% of these mums and dads added that this had forced them to cut back on their own savings, while one in 12 said this had stopped them saving altogether. The Scottish Widows report also evidenced that the older generations are also feeling the strain, with grandparents lending on average £3,665 to their grandchildren.
Two thirds of people said that a general lack of any spare cash is holding back their ability to save. Rising living costs in basic spend areas such as food, energy bills, rents and petrol are making life harder for savers. A freeze on pay rate increases, or increases below the rate of inflation, are adding to the cost of living at the expense of savings.
Messages from the Government and the finance industry, which seem sometimes to blame ordinary folk for not saving adequately for their future, are likely to fall on increasingly deaf ears, when many of us in the UK feel that our current financial difficulties were caused by the same people who are now sending out the messages!
This seventh annual Scottish Widows Savings and Investment Report is a major survey of the UK population, based on 5,223 interviews carried out by YouGov between 3rd and 10th December 2012. The aim of the report is to assess the savings behaviour of the UK population, observing trends and drilling into the views of various segments of the population.