Economic downturn hits Scots the hardest

Published on Friday 14 August 2009 20:01

SCOTS are less likely than homeowners elsewhere in the UK to have boosted their disposable income during the economic downturn, new research claims.

Just one in every 50 Scots has benefited positively from the recession, compared with one in every 16 people in other areas of the UK, according to Clydesdale Bank.

It said that while VAT cuts, low interest rates and the subsequent fall in mortgage repayment rates had allowed many to reduce their monthly outgoings in recent months, the extent to which they have done so varies significantly by area.

In the north-east of England, 21 per cent of those polled by Clydesdale claimed to have been able to reduce their monthly expenditure, compared with just 2 per cent of Scots.

But Scots are more likely to have used any mortgage savings to pay more off their balance, the research found.

Scots are also more likely to put savings away for a rainy day rather than spend the extra cash on a day-to-day basis, according to Steve Reid, retail director for Clydesdale Bank.

"The economic downturn has had a negative impact for many people but we have found that there are others who have positively benefited," he said.

"The numbers appear to be lower in Scotland, however, those who are benefiting appear to be taking a more cautious approach with the majority either saving the additional money or putting it into their mortgage."

Reid cited one Clydesdale customer in Glasgow, business development manager Ian Flynn, who has reaped rewards from the decline in interest rates.

"We have been lucky neither of our jobs has been affected and we were surprised that we have benefited from the economic downturn," said Flynn.

"Our mortgage payments have reduced and we also benefited from a reduction in price and VAT in buying a new car."