Families in Scotland are saving less than half of what they were a year ago as incomes decline and debts continue to rise, according to a report.
The Aviva Family Finances Report for August said the average amount being put away each month has fallen to £23 per family, compared with £52 in August last year.
It means the average Scottish family’s savings are down to £717, more than £400 less than the UK national average of £1,131, Aviva said.
The average monthly income for a family in Scotland stands at £1,833, slightly lower than this time last year when it was £1,952, and £170 less than the national figure of £2,003, according to the report.
It said the most common source of income for families is from a primary earner (75 per cent), followed by a second income from a spouse’s job (30 per cent).
More than a quarter (26 per cent) of Scottish families cite benefits as an income source, the report said.
Almost half (46 per cent) of families north of the Border have a mortgage, while 19 per cent rent a property and 11 per cent own their homes outright.
The finance report said families spend more of their money on debt repayment (12 per cent) than on food (11 per cent), but that the largest proportion of their income goes on housing (18 per cent).
However, it said “diligent” debt repayment appears to be paying off, as the typical household debt in Scotland is £4,712, compared with the national average of £10,563.
Louise Colley, head of protection sales and marketing at Aviva, said: “Savings have taken a drastic hit in Scotland this month.
“While this is unsurprising considering the fall in monthly income, it is concerning that the amount being saved has more than halved to just £23 a month.
“Money that might otherwise be put away in a nest egg appears to be directed at paying off debt, which on a more positive note is far less in Scotland compared to the rest of the nation.
“However, we would urge that where possible savings levels are maintained to soften the blow should an unexpected expense arise.”
Meanwhile, a separate survey yesterday found UK families are £1 a week better off than they were a year ago, marking the strongest improvement in disposable incomes in more than two years.
UK households had £151 a week left over after paying essential bills in July, the highest amount of discretionary income recorded in 16 months, following a “marginal” improvement in incomes recorded in June compared with a year earlier, Asda’s monthly study found.
Recent falls in inflation and better-than-expected unemployment figures drove a 0.6 per cent year-on-year increase in disposable incomes in July, representing the biggest improvement seen since March 2010.
However, the pressure on budgets could increase in the coming months as weaknesses in the labour market and wider economic uncertainty continue, the report warned.
Households have come under strain from high inflation which has pushed up living costs, at a time when they have also had low wage increases and struggled to find savings accounts that give them any real returns.
The income tracker said that food, clothing and transport inflation all fell back over July, while the unemployment rate also dropped to 8 per cent during the three months to June, a decrease of 0.2 percentage points on the quarter and the lowest rate since June 2011.
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