How government has failed the shocking number of Scots with no savings

I have friends whose strategy for the household budget always fascinated me: one dealt with savings, one dealt with spending. It worked for them. I was fascinated. For me, the spending and saving thing was always an intrinsically linked double challenge. And one which I'm not ashamed to say I haven't always succeeded in conquering.

So when figures released this past week showed that as many as a third of Scottish households have no savings, I felt an immediate lurch in my stomach, sadness and not insignificant fear of what the future might hold.

To have no savings, no safety net, is not what any of us would choose. The thought of anyone in this country being just one pay packet away from not been able to pay the rent or mortgage is frightening, and it’s not good enough.

Not just for what it could mean for us individually, but for what it says about the general financial state of the country and what we have got so wrong.

People without any savings will struggle even more if the economy takes a turn for the worse (Picture: Christopher Furlong) | Getty Images

People living on their nerves

According to new analysis by the abrdn Financial Fairness Trust, 32 per cent of households in Scotland said they have no savings last year, up from 29 per cent in 2023 and 9 per cent higher than in England – statistics which should give both of our governments pause for thought.

Increases in the cost of living, and the consequences, do not fall most heavily on those with the broadest shoulders. It is those with lower incomes, and lower levels of savings, who take the brunt.

That same survey found that almost a quarter of households felt they would have to borrow to make ends meet if their income fell. Increasingly in my mailbox and amongst those I talk to every week, I detect a sense of economic betrayal and that both governments’ policies have created a generation of people living on little more than their nerves. That has to change.

A perfect storm

In just over a year, those same people will take to the polls in what will inevitably be seen as a Scottish mid-term test for the Labour party. If John Swinney has managed to steer the SNP out of immediate danger, although a year is an incredibly long time in politics, Scottish Labour will have to hope their bigger political brother down south behaves themselves.

Brexit, Covid, and Ukraine have created a perfect storm which has challenged, and continues to challenge, businesses across all sectors. We need the economy repaired, which as ministers repeatedly remind us, means making difficult decisions and long-term investments.

Instead of pitting different generations against each other, we must make sure help is targeted at those who need it most. For me that means we should scrap the energy price rise for pensioners, abandon the national insurance hike, and make it easier for our businesses to trade with our European neighbours.

Crucially we need to ensure that financial help is there for those who need it. The statistics are not simply numbers, they are people that we all know.

That they are living with a threat to their financial security is no fault of theirs but of that perfect storm. We must not abandon them, or our economic future, to it.

Christine Jardine is the Scottish Liberal Democrat MP for Edinburgh West