Credit crunch hits UK saving habits hard

Julian Harris
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MORE than one in three British adults are failing to save any money at all, research showed today.

The after effects of recession, credit crunch and soaring living costs have combined to produce a generation of lost savers, according to a survey by YouGov and Scottish Widows.

The proportion of people saving has plummeted from 77 per cent at the start of 2009, to 64 per cent now, they said.

Around 18m people in the UK are now “non-savers”, with middle-earners and the middle-aged hardest hit by falls in saving, the statistics revealed.

Coined the “sandwich generation”, facing financial demands from both children and elderly parents, Britons aged 45 to 54 also face longer working lives to make ends meet.

The number of people working over the age of 65 more than doubled from 2001 to 2010, according to separate research published by the Office for National Statistics yesterday.

At the end of last year 870,000 over-65s were in work, compared to 412,000 people in 2001.

Three quarters of middle-aged people saved some money in 2009, but saving has collapsed among this group since.

Only 60 per cent of people aged 45 to 54 are now savers, the survey said.

People earning middle incomes (£20,000 -- £30,000 per annum) who save money dropped six per cent in the last two years, down to 69 per cent. Today’s young people could be 44 before they can afford to buy a home, the report warned.

Two thirds of those who did not save cited living costs as the main reason, while a third blamed debts.

The report also showed a north-south “savings gap” with the number of people failing to save anything in the north up by almost 50 per cent since 2009, compared to an increase of just 11 per cent in the south-east and south-west.

The Bank of England faces growing criticism for holding rates at emergency lows, while spiralling inflation increasingly squeezes households.

Interest rates were dragged down to their historic low of 0.5 per cent in 2008 and 2009, where they have been held for two years this month.