Scots see a big drop in household savings

New figures have revealed household savings in Scotland have fallen by 60 per cent since 2010.

In 2010, households had on average £3,840.41 in the bank, but by 2017 this was reduced to £1,517.31. The figures also found household spending has continued to increase at a faster pace than disposable income, adding to the risk people will go into debt.

Household savings in Scotland have fallen by 60 per cent since 2010, research figures reveal.

In 2010 households had on average £3,840.41 in the bank, but by 2017 this was reduced to £1,517.31, analysis from Scottish Labour shows.

The figures, from the Scottish Government quarterly accounts, published in October 2018, states that the level of households’ spending has continued to increase at a faster pace than disposable income.

“As a result, the savings ratio – which is the proportion of income left for saving or investment – has fallen to 2.7 per cent, down from 3.7 per cent in the same quarter last year,” the report said.

Earlier this week debt advisory charity Stepchange Scotland warned that almost 700,000 people in Scotland have debt problems are at risk of getting into difficulties.

The charity’s report Scotland in the Red said it had helped 30,000 people struggling with money last year and that council tax arrears affected 46 per cent of clients.

James Kelly, Scottish Labour MSP for Glasgow and party finance spokesman, said the reduction in savings was “fuelled” by stagnant wages and debt.

He said: “The Tories came to power promising a long term economic plan – but the impact of a disastrous near decade of austerity has been to shrink savings for families in Scotland. The Tories used to try and compare our complex economy to a household budget to justify their crusade to shrink the state – but instead all they managed to do was to shrink household budgets themselves.

“This is as a result of a cost of living crisis fuelled by stagnant wages and personal debt. All the while the incomes of the super wealthy have soared because of tax cuts at the top.

“Labour will make our economy work for the many, not just a privileged few by investing in our people communities and public services.”

Tom Arthur, SNP for Renfrewshire South and a member of the finance and constitution committee, said: “Unnecessary Tory cuts have held back our economy, damaged public services, and hammered the incomes of millions of Scots by squeezing family budgets. Whilst Labour and the Tories work hand-in-hand to slash household budgets and force more austerity on the UK, the SNP are helping people with the cost of living – whether that’s through free prescriptions for everyone, increased carers’ allowance, Best Start Grants for parents on low incomes and a range of other measures.”