Out goes booze and takeaways as Scots try to pay their bills

As incomes fall and the cost of living continues to soar, a large proportion of Scots are having to forgo their family holidays, takeaway meals and nights out to pay for food on the table and a roof over their heads.

Aviva’s Family Finances Report for 2012 found that average incomes fell by 13 per cent over the last year north of the Border, forcing families to reconsider their financial situation.

But although they are cutting back on all but the most essential spending, the average family is only saving £9 a month – 64 per cent less than they were able to save this time last year.

A quarter of families said they spent no cash at all on alcohol, while 16 per cent have cut back to ensure they do not fritter money away on restaurant and takeaway meals.

Children are also missing out on activities and after-school clubs as a result of the economic squeeze, as more than half of parents refuse to fork out for youngsters’ classes and clubs and 41 per cent say they do not spend on leisure activities.

However, despite painting a gloomy picture of the financial landscape in Scotland, Scots remain optimistic for the coming year, with 15 per cent of people insisting that booking a holiday during 2012 is currently on their to-do list, although almost a third admitted they had made no financial provision for the future.

Despite a lull in the housing market, the average property price in Scotland is still 14 per cent higher than it was a year ago, the Aviva report claimed – hitting a peak of £182,558. But the percentage of Scottish families living in rented accommodation in January 2012 is treble the figure from the previous January at 15 per cent.

Louise Colley, head of protection marketing at Aviva, said: “It is positive to see that families have recognised the importance of addressing and organising their finances.

“By doing so, and making an effort to build up a protection against unforeseen expenses, they allow themselves the best opportunity of coping with them.”

After spending on housing, which accounts for about a fifth of the average income, Scottish families are spending the largest proportion of their net monthly income on debt repayment of all areas of the UK at 13 per cent – ahead of spending on food, which accounts for 12 per cent of monthly pay.

Susan McPhee of Citizens Advice Scotland said: “For years now we have been reporting an increase in the numbers of people who are coming to the CAB because their finances are being squeezed between falling incomes and rising prices. Many of them turn to short-term loans as the way to pay off the next bill – but of course debt only makes matters worse.”