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The percentage of Brits who say they have no money to save increased from 50% in 2008 to a massive 85% in 2009 as the daily cost of living and the burden of debt increases.

Research from Scottish Widows has revealed that the nation’s savings behaviour is being severely affected by this year’s unprecedented economic environment. The biggest obstacle is the daily cost of living, as 75% believe this is a particular barrier for them. Also, the burden of debt on people’s pockets continues to impact as well, with 42% citing it as a barrier to saving this year, compared to just 32% last year.

Anne Young, savings expert at Scottish Widows says: “The rise in the number of people saying they have no money to save is alarming. It has become more of a priority for people to reduce their current debts and simply get by on a day to day basis rather than saving for their futures.

“However while paying off debts should still be a priority, in climates like these, it is important to save even a small amount now to get into a saving habit and build up some capital. And we should all regularly review what we are doing as our ability to pay debts and save can change.”

For those who have no money to save, almost a third say high taxes are a factor that prevents them from saving. Half of all respondents believe they would be encouraged to save, or begin saving if there were tax relief on all their savings.

There is an answer – offset mortgages. Not only will offset help with debts, but offset is a tax-free savings vehicle. It also offers savings each and every month if money is invested into the mortgage, meaning there is an added incentive to find money, which is all it would take for some people to save that little bit more.

There is no excuse for not saving if you opt for an offset. Money might be tight right now, but saving with an offset means you are saving for yourself and for your future.

SOURCE: Scottish Widows, 01/06/09

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