Financial education is vital to curb the disturbing trend of low personal saving, according to Scottish Widows.
The firm released its savings and investment report on 11 July, examining attitudes to and understanding of savings and investments.
The report found 39% of people are not saving anything for the near future, while just 15% save just 5% of income or less.
It also exposed a lack of understanding toward the risk and reward nature of investments, highlighting the population’s tenancy toward saving just cash, even in the long term.
Scottish Widows says it looks forward to working with Government and the FSA to try and heighten finance understanding, building on the National Strategy for Financial Capability.
The report also found 39% of parents are dipping into savings to help out their adult children, with an average outlay of £12,300.
Scottish Widows says the Government needs to promote which savings or investment products are appropriate for different goals, as well as shifting financial expectations to the long term.
They also call for a new single tax-incentivised ‘wrapper for life’, while they say 82% of current ISA holders would welcome an increase in ISA annual contribution limits.
Scottish Widows savings and investments head Gordon Greig says: “the Scottish Widows Savings and Investment Report demonstrates the need to understand people’s attitudes to saving, and highlight what needs to be done to encourage the nation to save.”
Policy Exchange’s Jesse Norman says he welcomes the research.
"It fills in a wealth of interesting detail, such as the increasing gap in savings behaviour between rich and poor,” he says.
“The report throws up important items for future research and policymaking.”
A full copy of the report can be found here.
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