Cost-of-living crisis: proportion of Scots struggling financially more than doubles

Nearly a fifth of Scottish adults report that their total household wealth has fallen in just seven months, with the proportion of those saying they are struggling financially having more than doubled, according to new data.

St. James’s Place (SJP), which specialises in wealth-management and investment advice, says its latest Financial Health Research Report reveals the “devastating” impact recent months have had on people’s coffers.

It found that 21 per cent of survey respondents in Scotland describe their current financial position as struggling, up from 10 per cent in October 2021, while two in five do not feel financially resilient, compared to 27 per cent previously. Scotland was just behind the 22 per cent across the UK that described their current financial position as struggling, compared to 14 per cent in October 2021.

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SJP also said that amid soaring inflation, which recently reached a 40-year high, more than a third of UK respondents do not feel financially resilient, compared to 29 per cent previously, with 26 per cent of women saying they are struggling compared to 18 per cent of men. Some 22 per cent of UK adults say their total household wealth has decreased over the past year, compared to 18 per cent in Scotland.

The wealth-manager also said many people have had to take action to cope with a more precarious financial situation, with 17 per cent of those across the UK having been forced to use their savings before they had planned, rising to 19 per cent of women.

Alexandra Loydon, SJP’s director of engagement and consultancy, said: “Understandably, a lot of people now feel they are struggling financially and have had to take action to cope, including dipping into savings earlier than planned.

“Our research shows women tend to be more concerned about the rising cost of living and the financial impact this is having. This is likely driven by the fact women tend to earn less than men, resulting in less disposable income and ability to save, which also contributes to smaller retirement pots.”

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St. James’s Place says 26 per cent of women say they are struggling money-wise compared to 18 per cent of men (file image). Picture: Getty Images/iStockphoto.

She praised people looking at ways to grow their wealth despite the difficult backdrop, but added: “Unfortunately, the cost-of-living crisis is going to reach more and more people as the year goes on, especially when energy bills rise again in autumn and Christmas costs come in.

Maximise

"Where possible, we would encourage households to both look at their spending and see if any cutbacks can be made, and also consider maximising current wealth by seeking the best interest-paying accounts or increasing risk appetite if appropriate.”

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She also recommends seeking guidance from a financial professional, with SJP having found that only about a fifth of UK respondents have received professional financial advice in the past year.

Separately, new data from financial mutual Scottish Friendly has revealed that the number of new adult investment ISA policies fell to its lowest level in nearly three years during the second quarter of 2022.

Kevin Brown, savings specialist at Scottish Friendly, said: “Inflationary pressures seem to be impacting women’s capacity to save far less than men at this time… Despite this contrast, overall there are very clear signs that many households are having difficulty in finding enough disposable income to maintain regular saving and investment habits.”

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