Increasing numbers of those in employment lack a sufficient savings buffer
Younger generations now the most likely to be regular savers
Concerns persist around meeting long-term savings needs
A growing number of Scots would be unable to survive on their savings for longer than a month if they were to become unemployed, according to research by Bank of Scotland.
30% of those in work say their savings would last for less than one month, an increase from 28% last year. Over half (57%) of Scots say they would survive for less than six months (compared with 61% last year), whilst around a quarter (24%) are confident they have sufficient funds to keep them going for more than a year, unchanged from last year.
The savings shortfall is most acute in West Scotland, where 40% of people say their savings would last less than a month if they lost their job. This compares with just 22% of people in the Highlands and Islands.
But more Scots are now saving
Despite the squeeze on personal finances, there has been an increase in the overall number of Scots who are saving regularly – with two thirds (66%) now putting money away for either short-term or long-term needs, up from 62% last year.
Aberdeenshire has the greatest proportion of savers, at 73%, whilst Dundee has the lowest in the country at 58%. Perhaps surprisingly, it is the younger generations leading the way – with 78% of 18-24 year olds now in the regular savings habit, compared to 65% of over 55s.
Why people are saving
Of those saving for the short-term, 60% of people say it is for emergencies or a rainy day fund. 42% are saving to fund travel, while 21% say it is in case they need to help out family members.
Unsurprisingly the most common reason given by those saving for the long-term is to provide them with a more secure future (47%).
However, only three in 10 (29%) Scots feel they are definitely saving enough to meet their long-term needs. Almost half of all 18-24 year olds (47%) say they are not saving enough for their long-term needs, compared to just one in five (21%) over 55s.
Ricky Diggins, Network Director of Bank of Scotland, said:“It’s reassuring that more Scots are getting into the savings habit. As well as being able to pay for that dream holiday or perhaps help out friends and family, these funds provide a vital safety net should there be a sudden change in personal circumstances.
“Young Scots are now amongst the most active savers, with over three-quarters putting money aside regularly. Whilst this obviously bodes well for the future, it’s clear that more still needs to be done to ensure that people’s longer-term savings needs are being met.”