One in Three Unable to Save
A third of adults are unable to save anything at all due to the economic downturn, a new study reveals.
Around 18 million UK adults are failing to put anything aside for the future, accounting for 36 percent of the population, the fifth Savings and Investment report from Scottish Widows showed.
This figure reflects a 16 percent rise in the number of non savers, from 20 percent in 2009, which means an extra eight million in 2011 will be either unable to save, or intend on spending their money elsewhere.
“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,” said Ian McGowan, Scottish Widows head of savings and investments.
The study revealed 31 percent of those earning £20,000-£30,000 are not saving anything, and over half of this group are saving five percent or less of their salary.
These middle income earners cite expensive living costs as the largest obstacle to them saving with 75 percent admitting this, compared to 65 percent of those earning £10,000 or less. This shows the vulnerable position many middle earners are in following the withdrawal of former dependencies, such as child tax credits.
On average, 40 percent of 45-54 year olds are unable to save anything –and this group are struggling the most to put money aside.
This generation were shown to have a number of financial demands placed on them from children and parents, such as pension costs, and high university fees.
“We are moving into a world in which people are going to take more responsibility for their long term savings needs and this latest report is a timely reminder of that,” added Richard Saunders, Investment Management Association chief executive.