More Scots saving money for later life

More people in Scotland are putting money aside for later life, according to new research.

The number of Scots saving for retirement has risen sharply to 84 per cent. Picture: contributed

The annual Scottish Widows retirement report shows the number of Scots saving for retirement has risen sharply to 84 per cent, up from 75 per cent in 2017.

However, those saving adequately – defined as at least 12 per cent of their income - has stagnated at 58 per cent, down from 59 per cent the year before.

Robert Cochran, retirement expert at Scottish Widows, said: “While it’s encouraging that more Scots are putting something aside for retirement, the fact that adequate savings levels have stagnated shows that auto-enrolment is not a silver bullet.

“This year’s study shows some members of society are slipping through the net because of minimum earnings thresholds.”

The report suggests the trend is expected to continue as about six in ten Scots (59 per cent) say it is unlikely they will be able to save more in the next year than they do now.

More than a third (35 per cent) said the reason they are not saving more into their workplace pension is because they cannot afford to.

“It is therefore not surprising that just three in ten people in Scotland feel optimistic about their retirement, down from 35 per cent last year,” the report said.

The proportion of UK workers saving adequately for retirement has dropped slightly for the first time since 2013, falling from 56 per cent to 55 per cent.

Despite adequate savings rates rising by 10 per cent since auto-enrolment, the report said a renewed effort is needed to improve the nation’s readiness for retirement.

It added: “We want to see earnings thresholds scrapped entirely at a much quicker rate, to let all workers 
benefit from employer contributions.

“We’d also like to see the age at which workers become auto-enrolled reduced to 18, thereby increasing the number of people who can participate in workplace pensions. “

Meanwhile, separate research today finds that more bank account holders are now saving regularly - but one in eight still do not have a “rainy day” pot of cash they can access quickly.

More than a third (37 per cent) of people surveyed in April say they are saving at least once a month – up from 31 per cent when a similar study was carried out in November 2017, the Lloyds Bank Savings Report found. Over three-quarters (76 per cent) of those surveyed have saved some money in the past 12 months – and one-fifth (20 per cent) expect to be in a position to save more in the next year.

But 12 per cent of people do not have any savings they can access immediately, the survey of more than 2,000 people across the UK found.

Over a third (36 per cent) have less than three months’ worth of essential spending in savings.

Nearly half (47 per cent) of people feel anxious, worried or insecure about the amount of savings they have, with 56 per cent unhappy with their current level of savings, the survey found.

The average amount people said they had squirrelled away in the past month was £442.