The study by Scottish Friendly and the Centre for Economics and Business Research (CEBR) found that one in six (16%) adults have used all their savings and investments in the past six months to help boost their income to pay for essentials.

Overall, over half (52%) of UK adults have withdrawn some money from their savings and investments to help meet rising living costs.

Official figures from HMRC show that household saving levels are in decline as peoples’ incomes are being squeezed tighter. In 2020/21, the amount of money subscribed to adult ISAs fell by £2.4 billion on the previous year.

More than seven in ten (72%) respondents surveyed are worried they will not be able to save regularly over the next 12 months, which suggests this downward trend could most likely continue.

Households may also be feeling less incentivised to save as the interest rates offered on the best paying cash accounts continue to fall well short of the current rate of inflation, which is set to reach double digits later this year.

However, there are signs that more people are looking to investments as a way of securing their wealth.

Data from HMRC shows that falling ISA subscriptions have been largely driven by cash ISAs, which decreased by £12bn in 2020/21.

In contrast, the amount subscribed into stocks and shares ISAs has gone up by £10bn since 2019/20.

Kevin Brown, savings specialist at Scottish Friendly, comments: “People tend to save more when their income is relatively high and draw upon this money when it is weaker.

“This method provides some protection in periods of high inflation and low wage growth. But for many families they have already used up their savings buffer or may not have been able to afford to save in the first place.

“This means they may now be forced to borrow money or to cut back on how much they spend. For example, official figures now show that many families are buying less food as prices carry on going up.

“The situation is clearly getting more difficult for households to manage. In addition, anyone that does have the ability to save gets little in return because interest rates trail so far behind inflation, which means the value of their money is being quickly eroded.

“With this in mind, it is understandable why those that can still afford to do something, may consider turning to investing into stocks and shares ISAs as they can offer the potential for greater returns.”