Scottish Widows comments on George Osborne - Savings Culture speech

Commenting on George Osborne's speech at the ABI, Anne Young, savings expert at Scottish Widows said:

"We agree with George Osborne's recommendation to start building a pool of domestic savings to drive our growth - meaning we must be encouraged to save more.

Research from the third annual Scottish Widows Savings and Investment Report1 reveals the nation's savings behaviour is being severely affected by the current difficult economic environment.

Over four out of five (85%) Brits say having no money is a major barrier to saving.

This figure has increased significantly since last year, when only half (50%) of Brits stated having no money was a major barrier to saving; a clear symptom of the increasing pressure on the nation's finances in the recession.

The burden of debt on people's pockets impacts people's savings as 42% cited it as a barrier to saving this year (compared to 32% last year).

"It has become more of a priority for people to reduce their current debts and simply get by on a day to day basis rather than saving for their futures.

However while paying off debts should still be a priority, in climates like these, it is important to save even a small amount now to get into a saving habit and build up some capital.

And we should all regularly review what we are doing as our ability to pay debts and save can change.

"For those who have no money to save, almost a third (31%) say high taxes are a factor that prevents them from saving.

Half (50%) of all respondents believe they would be encouraged to save, or begin saving if there was tax relief on any interest or profit on their savings.

"The Government should encourage and educate people to put money aside for their future, even when many individuals think they can't afford it, or don't fully ;understand how best to do it" 1 This survey was carried out online by YouGov who interviewed a total of 5947 adults between 6 - 12 January 2009.

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