Barriers to Saving Increase as Personal Debt Continues to Rise
The percentage of Brits who say they have no money to save increased from 50% in 2008 to 85% in 2009. Daily cost of living is biggest barrier to saving, Burden of debt has increased - 42% cite it as a barrier to saving (up 10% from 2008), 31% with no money to save say high taxes is a contributor to this
Edinburgh, Scotland (PRWEB) June 13, 2009
Research from the third annual Scottish Widows Savings and Investment (http://www. scottishwidows. co. uk/investments/index. html) Report reveals the nation's savings behaviour is being severely affected by this year's unprecedented economic environment. Over four out of five (85%) Brits say having no money is a major barrier to saving. This figure has increased significantly since last year, when only half (50%) of Brits stated having no money was a major barrier to saving; a clear symptom of the increasing pressure on the nation's finances in the recession.
For those who say having no money is a major barrier to saving, the biggest obstacle is the daily cost of living, as 75% believe this is a particular barrier for them. Daily living costs has seen a big increase since last year in contributing to Brits having no money to save; 67% cited this as a particular barrier in 2008. The burden of debt on people's pockets continues to impact as well, with 42% citing it as a barrier to saving this year compared to 32% last year.
Anne Young a Savings expert at Scottish Widows comments: "The rise in the number of people saying they have no money to save is alarming. It has become more of a priority for people to reduce their current debts and simply get by on a day to day basis rather than saving for their futures. However while paying off debts should still be a priority, in climates like these, it is important to save even a small amount now to get into a saving habit and build up some capital. And we should all regularly review what we are doing as our ability to pay debts and save can change."
For those who have no money to save, almost a third (31%) say high taxes are a factor that prevents them from saving. Half (50%) of all respondents believe they would be encouraged to save, or begin saving if there were tax relief on all their savings. As well as having no money to save, Brits feel savings and investing is a complicated issue, as 13 % said difficulty in understanding how to go about saving or investing stops them from doing so. This figure rose to 19% amongst those aged 18-24, showing the younger generation need the most help when it comes to understanding savings.
Anne Young continues: "There is a need to encourage and educate people to put money aside for their future, even when they think they can't afford it, or don't understand how to do it. It was announced in the Budget that the Individual Savings Account (ISA) limit is set to rise to £10,200 from October this year for those in their 50s and over and from 6 April 2010 for the rest of the nation. This is a positive encouragement to savers and will go some way to help those who are struggling to get investment returns in the current environment But as our research has shown, people need to better understand these savings vehicles, and particularly the potential tax benefits. And although the current economic and financial climate has raised the profile of the need to prepare adequately for the future, the Government and the industry must grasp the opportunity to inform and educate people as to the most appropriate way to save and invest."
Scottish Widows was founded in 1815 as Scotland's first mutual life office. Becoming part of the Lloyds TSB Group in 2000, which subsequently became Lloyds Banking Group in 2009, Scottish Widows has become one of the most recognised brands in the life, pensions and investment industry in the UK. The product range includes ordinary long term insurance, such as life assurance, pensions, annuities and permanent health insurance, and savings and investment products. Using a multi-sales network of Financial Advisers, Direct Sales, Direct Marketing, the Internet and via the branch network of Lloyds Banking Group, Scottish Widows currently employs about 4,000 people.
Scottish Widows provide a wide range of financial services including life insurance (http://www. scottishwidows. co. uk/life_insurance/index. html), pensions (http://www. scottishwidows. co. uk/pensions/index. html) and individual savings accounts (ISAs) (http://www. scottishwidows. co. uk/investments/individual_saving_accounts/index. html).
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