The research, by the bank’s personal loans division, has exposed the extent of the financial divide in Scotland and shown how household finances in 2021 are set to be dictated by the lasting effects of the pandemic.

More than four in ten (43%) households are worried about being unable to pay a large, unexpected bill while nearly a quarter (24%) are concerned about maintaining their current credit agreements.

However, in sharp contrast, over one fifth (23%) of people in Scotland say they are in a stronger position financially than before the first UK lockdown. Many of those have benefitted from reduced outgoings since March and are planning to take full advantage of their extra savings in 2021.

Nearly one third (31%) of respondents in the country say their savings have increased since the UK first went into lockdown. Of these, 29% have increased payments into existing cash savings accounts, meanwhile a quarter (25%) have opened a new cash savings account and 12% have increased what they invest in stocks and shares.

The majority (80%) of these people plan to spend the money this year, with the following being the most popular, intended outlays:

• Holiday (39%)
• Home improvements (27%)
• Children’s / grandchildren’s savings (12%)
• New house (10%)
• Wedding (10%)
• New car or used car (10%)
• Consolidate debts (6%)

Consumer spending habits have changed exponentially since the start of the first lockdown in March last year.

A quarter (25%) of respondents surveyed said reduced outgoings has had a significant positive impact on their finances and one in five (19%) people in Scotland used 2020 as a chance to pay down their debts.

But the squeeze on household finances continues for many other families. More than one in five (22%) of those surveyed in Scotland have seen their debts rise this year and almost one in five (19%) do not expect to be any better off by the end of 2021.

More than a quarter (27%) of people in the country plan to borrow over the next 12 months with credit cards (11%) and mortgages (9%) the most likely form of credit.

Paul Went, managing director, consumer at Shawbrook Bank, commented: “2020 was a challenging year for us all and we had to adapt to unprecedented circumstances. As a country, we entered a recession for the first time in 11 years.

“Families in Scotland facing furlough or reduced hours have had to cut back on spending to meet everyday living costs while others have been lucky enough to put a little extra aside. Whatever category you fall into, the beginning of the year is a great time to assess your finances, and the coronavirus pandemic has only highlighted the importance of saving and budgeting.

“Taking money management back to the basics by reviewing how much you have coming in versus what is going out is always the best place to start if you want to get on top of your finances. Wherever possible people should aim to have three months of expenses saved up as a rule of thumb, as this will give you a buffer should the unexpected occur.

“For those thinking about borrowing or taking out new credit, this is not a decision to rush into. Think carefully and take the time to shop around to make sure you are getting the best deal for you. If your circumstances change, would you be able to afford repayments? Do your research before committing to any additional finance and make sure you read the small print within any contracts.”