Jayne Dowle: Saving disgrace of a nation with no financial safety net

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ALMOST a third of us are failing to put away a single penny for the future. That equates to 15 million people in the UK without any savings at all. This means nothing aside for a rainy day, never mind the torrential one when the roof blows off the house. How things have changed in just a couple of generations. Our parents and grandparents prided themselves on saving regularly; I recall my late aunt worrying that there would be “nothing aside to bury her with” and the insurance man calling round every Friday.

We might have smiled at such penny-pinching parsimony, but how envious are we now, facing the fact is that once the bills are paid, many of us simply don’t have anything left at the end of the month to put aside? And if we do manage to save a bit, a third of us have so-called nest eggs which amount to less than £1,000, which is barely enough to cover most people’s mortgage and council tax for a month, never mind a decent burial.

You might argue that matters of personal finance should remain just that, personal. However, when so many people are affected by a lack of material security it has implications for the way we all live. The truth is we are a society teetering on the brink of a financial precipice. There is no room for manoeuvre, no safety net, and although I accept that we should all be ultimately responsible for our own financial well-being, when it gets this bad it becomes a matter that requires consideration at the highest level. Far be it from me to cause mass panic, but shouldn’t someone in government at least be acknowledging the issue and attempting to do something 
about it?

I’m not arguing for a minister to be put in charge of snooping into our bank accounts. However, it does seem odd that we have a government which believes it has the moral right to tell people when to get married, and ministers who consider it their duty to instruct parents in how to raise their children. Yet no one, as far as I am aware, has taken it upon themselves to address the fact that a large proportion of the nation’s adult population is, essentially, totally without means. These politicians are hiding from the truth just as some of us hide from those brown envelopes when they drop through the letterbox.

This can’t go on. Obviously, no politician has the single-handed power to increase our earnings, reduce the cost of living and transform our finances overnight and for good. However, I ask for two things to be considered; a proper understanding of what austerity really means for ordinary people, and some sustained effort put into creating measures which might be able to help at least some of us save a little bit.

The problem is, successive governments have hardly got a spectacular track record on personal finance. Stakeholder pensions, heralded as the great saviour for many workers, are no less confusing than any scheme which preceded them. And, on the evidence to date, bungling ministers can’t even be trusted to provide a safe haven for our children’s money. Child Trust Funds, introduced by the 
Labour government in 2002, 
were scrapped by the coalition, leaving thousands of parents 
with investments which have turned out to be worth not much more than the paper they were written on.

It is all very well for new lessons in financial management to be made compulsory in schools, but what use will these lessons be when our children will probably end up even worse off than we are? A quarter of those people surveyed by Scottish Widows said their savings were depleted because they had handed out loans to their children, often to help them buy a house of their own. Sadly though, all too often parents are being called upon to lend cash just to help their offspring cope with the cost of day-to-day living.

The implications of all this 
are even more terrifying than a house without a roof, or no house at all, which is a very real prospect for countless people.

If we can’t even make modest savings, how can we find the wherewithal to invest in a decent pension to allow us to retire with some kind of security? The number of workers forced to 
carry on clocking in over the 
age of 65 has already hit record levels and can only continue to climb.

Another recent survey, for an asset management company, found that one in 10 of us now accept that we will have to work until we drop, with no hope or expectation of retirement. This will have a massive effect on our health, our homes and our consumer habits, yet government policies are barely evolving to reflect this.

It is clear to me that we can no longer enjoy the luxury of keeping personal finance personal.

It must get political and, however difficult and painful the process of finding solutions for our long-term security will be, it is time for us all to put our cards on the table.