Nearly half of working Scots have less than £100 saved

The research by the Money Advice Service shows that 4 in 10 (40 per cent, 16.8 million) working-age people across the nation lack a savings buffer, with less than £100 in savings available to them at any time.

These worryingly low levels of savings mean that huge numbers of people are vulnerable to unexpected bills or unplanned expenses that may have serious consequences on their financial stability.

With nearly three-quarters (71 per cent) of people hit by unforeseen expenses at least once a year so many lacking the savings means large numbers of people are turning to credit or borrowing from friends and family to cover the costs.

However, while saving presents a particular challenge for low income earners, the research showed that many can and do save.

The figures revealed that 23 per cent of working-age adults on a household income of less than £13,500 have more than £1,000 in savings and 40 per cent save every/most months.

While it is already known that levels of income, debt and life stage all affect consumers’ approach to saving, the Money Advice Service’s new research highlights further factors that influence savings behaviour across the UK.

These include a ‘live for today’ mindset where UK consumers feel they can’t or won’t prioritise saving because of the scale and variety of commitments and demands in their day-to-day life. The research also highlights the importance of saving regularly, even if the sums are modest.

The critical message coming out of this research is the importance of saving regularly, even if the amounts are small. It’s vital that people have day-to-day money management skills to engage with their finances and find the opportunities and motivation to put a little cash aside to meet their financial goals. Saving regularly, even in small, manageable sums, can make a real difference to people’s financial security.

Speaking about the research, Nick Hill, Money Expert at the Money Advice Service, said: “These figures show the millions put at risk by the saving gaps in the UK. Everyone’s situations and abilities are different, so it’s important to find an approach to saving that’s right for them and their household. For some on low incomes, saving is a real challenge as they may simply lack the income needed to save at all.

“But for many, developing a savings habit is very achievable. Regular saving is key to building up that buffer against those life surprises. If you earn enough to set even a little aside each month that’s great - a direct debit into a savings account might be an easy way to do this, even if you start small and increase the amount with time.

“Our research also showed that if people set a manageable savings target, they’re usually able to reach it. Setting a savings goal – in the case of our study of £100 a month – was shown to have a positive impact on people’s financial skills and their attitude towards savings.”