A total of 13% of adults in Scotland surveyed by Savanta ComRes for R3’s latest Personal Debt Snapshot say they would be most likely to use a credit card if they were faced with a sudden gap in personal finances.

A further 10% would ask family or friends for a loan, the same proportion said they would use their overdraft (10%), and 1% would apply for a bank loan (a combined 34%). This is the same as the equivalent percentage for UK (34%).

Positively, 47% of respondents in Scotland say that they would be most likely to use personal savings as a solution to an unexpected gap in their personal finances, around the same as the figure for Great Britain overall, at 48%.

Tim Cooper

Tim Cooper, chair of R3 in Scotland and a partner at Addleshaw Goddard, said: “At R3 in Scotland, we feel greatly encouraged to see that a lot of people would access savings rather than increase short-term, expensive debt. It is a false economy to opt for the latter when the former is available. However, a high proportion of adults in Scotland are very vulnerable to financial shocks.

“Low-interest rates help to make borrowing more affordable in the short term, but getting into debt can make a gap in finances even bigger over time. It can lead to a cycle of debt and stress which is hard to break, especially when emergency borrowing is added to pre-existing debt.”

Worryingly, 2% of adults in Scotland would cover a gap in finances by not paying rent or utility/telecoms bills.

Tim Cooper added: “Skipping other bills is an option of last resort, and it’s a concern that some people find themselves in this situation. Not paying bills can store up problems for later.”

In the UK overall, the research found that homeowners are significantly more likely to say that they would be most likely to use personal savings to address an unexpected gap in their personal finances (55%) than those living in rented accommodation (34%).

However, younger British adults (those aged 18-34) are significantly more likely than their older counterparts (those aged 55+) to say that asking family or friends for a loan or support would be one of their top three most likely solutions (61% vs. 20%).

And more women than men say that asking family or friends for a loan or support to address an unexpected gap in personal finances would be one of their top three most likely approaches (45% of women vs. 36% of men).

Mr Cooper concluded: “The first step for anyone who is concerned that what they owe may outstrip what they earn – even if it’s temporary – is to speak to a qualified expert, like an insolvency professional.

“They’ll be able to help you fully understand your finances and the options you have for resolving the issues you face. And the sooner you seek advice, the more options you’ll have – and the more time you will have to make a decision about how you move forward.”