It’s good to talk: Experts on how to rescue Scots in savings crisis
One in five Scots have no savings at all and another 450,000 have less than £100 in the bank, according to a recent report.
Research from the Money and Pensions Service (MAPS) shows that almost a third of adults in Scotland are living without a financial safety net to cope with the rising cost of living or unexpected bills, meaning some may have to use credit.
Athough credit is an important tool when used and managed well, MAPS says it’s crucial that people understand what they are able to afford and have a plan to pay it off.
However, the figures also reveal many people are already finding this difficult. Among the 82% of people who use credit, two in five are now anxious about how much they owe. The same number of adults are worried about the number of different financial products they have.
As cost of living pressures start to hit home, MAPS says it’s more important than ever to talk about money before problems set in. However, its survey also revealed that 85% of people still avoid discussing their finances.
Asked why, the most common responses were “not wanting to be judged”, “shame or embarrassment”, and “fear of burdening others”.
MAPS is encouraging everyone to open up about money, plan for their financial future and take free debt advice as soon as they need it.
Allison Barnes, manager of MAPS in Scotland, said: “Over a million people across the country find it a challenge to save and this leaves them vulnerable when sudden expenditure items arise.
“When you add in the anxiety they feel with their credit commitments, the weight of that worry can quickly become overwhelming.
“We want everyone to start the conversation with family or friends and share the burden of any money worries.
“By dealing with the problem head-on, people can discover just how helpful free debt advice can be and see the importance of talking to their creditors early. They can also begin to find a way forward, no matter how difficult their situation might feel.
“Free help and guidance on how to do this is available and I’d urge everyone who needs it to get in touch today.”
The organisation’s Moneyhelper service is seen as a first port of call, offering free guidance on topics like everyday spending, savings and where to find free debt advice.
It also provides a range of information on dealing with money issues, including step-by-step guides on how to talk to your creditors or discuss money with family and friends.
People can get free guidance about their money via moneyhelper.org.uk or by calling 0800 138 7777.
For those who can still afford to put some money away for a rainy day, banks are now offering some of the best savings rates in more than a decade and easy-access savings accounts have also received a boost.
Finance experts say that if your money is earning a pittance, now is the time to switch to a better-paying account.
Research has found that while there are a growing number of deals emerging, almost
£270 billion is languishing in UK accounts that pay no interest at all. It also found that fewer than a third of people have switched accounts in the past 12 months, while about half have not switched for five years or longer, or have never switched.
Rachel Springall of Moneyfacts said fixed-interest rate-paying accounts provided a clear, guaranteed return for savers during these unprecedented times, and the top-paying fixed-rate bonds “are reaching heights not seen for many years”, fuelled in part by challenger banks competing to bring in cash.