Scots have been accused of “investophobia” by financial mutual Scottish Friendly following a survey which revealed that many people in Scotland remain reluctant to invest their money.

Calum Bennie, Scottish Friendly’s savings specialist, said savers were “effectively letting their money diminish” due to a combination of inflation and rock bottom rates on cash accounts reducing the value of their savings in real terms.

Almost two-thirds of the savers (62%) in the research are aware that interest rates on savings accounts are less than the current rate of inflation, but the fact that they are losing money in real terms seems to do little to change their minds.

Almost half (48%) of respondents in Scotland said they wouldn’t consider investing in stocks and shares even though inflation reduced the value of the money they have in secure cash savings. However, confusingly, the most common reason cited by more than four in ten (47%) of respondents that would not invest was fear of losing money.

The findings for Scotland also revealed that:

Mr Bennie said: “By holding savings exclusively in cash at the moment many Scottish savers are effectively letting their money diminish. Every pound that they save becomes less valuable while held in an account that delivers returns below the rate of inflation. Worryingly, our findings suggest the savings and investment decisions of so many Scots are being driven by a nagging fear of losing money and this ‘investophobia’ may be clouding personal judgement when it comes to important financial decisions.

“Investing is not without risk of course and the value of investments can go down as well as up. However, interest rates on secure cash accounts have been rock bottom for a very long time now and inflation is consistently eating away at the value of that money. Attitude to risk is a personal thing and ultimately you shouldn’t feel uncomfortable about where you’ve put your money. If you’re waking up with a cold sweat in the middle of the night it’s clearly not the right option for you. However, it seems that many savers are not willing to even consider stepping out of their comfort zone to look at possible investment options, which suggests fear is winning out over options that could make financial sense.

“Investing doesn’t have to be scary, or complicated, or only for the wealthy; it’s for everyone. It is a tool that is readily available to all that could help empower financial well-being and could be well worth considering at the very least. Don’t let fear stop you from considering ways that could make your money work harder.”