Downturn hits pensions savings

It has been suggested following recent research that the economic downturn and financial meltdown that has been seen over the past couple of years has had a serious negative impact on pensions savings amongst consumers in the UK. Many have found themselves struggling to make ends meet financially, and this means that they have had to make other financial sacrifices, which for some has meant their pensions provisions.

Scottish Widows, the pensions and life insurance provider, carried out the research and according to the results of the study there has been a fall of around 6 percent in pensions savings over the past year, with the total now falling to 48 percent. This is said to be the lowest it has been since 2006.

The study showed that 41 percent of people said that the reason that they had been saving less – or saving nothing in some cases – was due to the economic downturn. Women aged fifty and over were found to have been worst hit, and whilst 52 percent of women in this age group put enough money aside for retirement last year this feel to just 38 percent.

Officials from Scottish Widows said that the effects of the global financial crisis were only just starting to affect the pensions savings market even through the crisis began back in 2007. Many people were found to be failing to put any money aside at all for their retirement, including many of those that were nearing retirement age such as the over fifties age bracket.

An official from Scottish Widows said: “The whole nation is feeling worse off than a year ago and this is really starting to take its toll on pensions savings. While there are signs that the economy is recovering, the nation’s saving habits paint a very different story.”

Tags: scottish widows, retirement, Pension, investment, finance

Shoppers choosing cash rather than credit

Consumers are cutting back on their credit card spending and increasingly using cash to pay for their purchases, it has been claimed.

A survey of 17,000 shops conducted by the British Retail Consortium (BRC) revealed that cash was used for 60 per cent of transactions last year, up from 54 per cent in 2006.

The BRC said this shows people are concerned about spending money they do not have and want to keep tight control of their finances.

Another issue raised by the BRC is the cost that credit card companies charge retailers, which is four times the amount of a cash transaction.

Consumers are forced to pay for the extra charges as retailers pass them on through increased prices.

“There should be a lower fixed fee per transaction which actually reflects the cost of processing, so new technology brings balanced benefits to retailers, consumers and banks,” said BRC director general Stephen Robertson.

Savings expert at Scottish Widows, Anne Young, recently said that young people get into trouble due to the “proliferation of credit” that is now available to them, adding that more should be done to educate people on managing their credit.

Tags: credit, scottish widows, young people, Financial services, Payment systems, amount, Business Finance, online shopping

Finances are taboo

Most of us are more comfortable talking about health issues with friends and loved ones than we are discussing finances.

That is according to Scottish Widows which carried out research into the subject and found that banking has become a taboo subject.

Two thirds of us apparently do not tell our family members how much we earn and only one third know how much our partners earn.

One in five admit to being uncomfortable talking about salary, savings and investments with out partners, yet we are most comfortable discussing money with our work colleagues.

Men are said to be twice as likely to reveal their salary to a work colleague as they are to their mates.

Scottish Widows’ customer and brand marketing director Mike Hoban is surprised by the trend but says that it also explains why many people’s finances are in a mess.

“As a nation, we’ve become increasingly liberal – we are happy to talk to our loved ones about sex, relationships and health problems, but despite this modern trend in honesty it seems that money is now the topic we avoid,” he said.

“It’s no surprise that the nation is under-saving and under-preparing for the future when money is clearly such an uncomfortable subject.

“If you really can’t face discussing money with people you know, it might be a good idea to seek professional financial advice,” he added.

Tags: salary, Widows, family members, scottish widows, hoban

Young adults spending parents’ money

The current generation of young adults still rely on their parents for financial handouts, according to research.

Scottish Widows says that many people have become so bad at banking and managing their finances that poor old mum and dad are having to spend their savings on helping out the kids.

The firm claims that ten million ‘adult children’ have used money from their parents’ savings, with 39 per cent of parents spending cash which they were saving for themselves.

Most parents give a total of £12,300 to their children as either a loan or a gift, meaning the UK’s parents are losing a total of £55 billion to their kids.

“Our research shows that parental responsibility no longer ends when your children reach adulthood but lasts for many years after that,” said Anne Young from Scottish Widows.

“Parents may be shocked to learn that their savings could be sapped by about £12,000 after their children leave home. We recommend they try to prepare for the possibility of this happening by creating their own Savings Sap fund.”

The money is generally put to good use, with 29 per cent of ‘adult children’ spending it as a deposit towards a mortgage for a new house.

A further 23 per cent spend it on buying a new car, 15 per cent on buying furniture and 14 per cent on clearing debts.

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Only quarter of Brits have adequate insurance cover against loss of income

A recent study carried out has shown the low level of insurance protection cover amongst Brits against loss of income in comparison to the reliance of British households on more than one income. According to the study almost fifty percent of households in the UK rely on more than one income in order to cover living costs, spending, and expenses. However, only a quarter of Brits seems to have adequate insurance cover to protect against the loss of their income.

The data comes from the Scottish Widows Protection Report. The information from the report showed the low level of protection amongst Brits when it comes to insuring themselves against loss of income due to situations such as illness or death. The report also showed that the majority of Brits had less than two months salary in savings to cover them in the event that they ended up losing an essential income.

According to the report: “These findings show that if a breadwinner becomes long-term ill – or dies – the average household in the UK does not even have their essential expenditure covered – let alone enough money for those little luxuries.” The report also indicated that even those with over thirty thousand pounds in savings shouldn’t get too complacent about how they would manage in the event of a loss of income: “Many people aspire to do more than just ‘survive’ a crisis – they wish to maintain their current lifestyle.”

A spokesperson from Scottish Widows stated: “The majority of the population is walking a financial high wire without a safety net. Nobody knows what is around the corner, but we have to accept that all too often illness does strike and accidents do happen. If people don’t start to take responsibility for their own financial futures then they could be left in a position where they can’t even cover the essential expenditure in their lives.”

Tags: company, cover, income, lifestyle, Insurance, scottish widows