YORKSHIRE is facing a “savings time bomb” with more than a third of people in the region failing to save anything for retirement, according to new research.
The survey of people’s saving habits across the UK saw the region, which included Yorkshire and North Lincolnshire, rank at the bottom of a league table based on the average ‘net savings’ for adults in each part of the country.
While people in Yorkshire and North Lincolnshire saved an average of £544 from July to September 2013 their efforts were undermined by a higher-than-average new debt level of £335 per person.
This left a ‘net savings’ total of £209 per person, per quarter, which puts the region in last place in the table, with an average of £20 per person less than Wales, the next lowest region.
The research by financial services firm True Potential surveyed more than 2,000 adults across the UK regions, including 183 in Yorkshire and North Lincolnshire.
Thirty three per cent of people surveyed in Yorkshire and North Lincolnshire are confident they would have enough saved to live comfortably in retirement, while 36 per cent said they were currently saving nothing at all.
David Harrison, managing partner at True Potential, said Yorkshire’s performance on the net savings table was caused by two key factors – not saving enough and taking on too much debt.
“We have a nationwide problem with saving and Yorkshire (and North Lincolnshire) is no different. So few people have any confidence that they will have saved enough for retirement and so many are currently saving nothing,” he said.
“It will be disappointing for the region to finish at the bottom of our league table but the combination of low savings and high debt is clearly causing a problem.
“People are struggling to save anywhere near the amounts that they will need for retirement and, when they do, they are often undermining their efforts by taking on expensive debt on credit cards or payday loans.”
He said that the average savings figures only tell half the story. “It is crucial to look at the bigger picture and analyse the amount of debt that people are taking on as well.
“The trend towards impulse borrowing is a huge concern, with the availability of payday loans making it very easy to do so,” said Mr Harrison.
“This is a short-term point of view that will have long-term damage to the well-being and comfort of millions of people as they eventually head towards retirement over the next 20 to 40 years.”
Across the country, Londoners are managing to save the most – with a net saving of £439.30 per person, per quarter. In London, 41 per cent of those surveyed said they were confident of saving enough to retire in comfort, while 29 per cent said they are currently not saving at all.
The North East recorded a net saving of £386.60 per person, per quarter, placing the region in second place in the league table. Thirty one per cent of respondents to the survey in the region said they are not currently saving anything at all, with 30 per cent saying they were confident of saving enough for a comfortable retirement.
While Yorkshire and North Lincolnshire ranked at the bottom of the table, with Wales close behind, the South East also recorded a relatively low ‘net savings’ figure of £267.80 per person, per quarter.
Mr Harrison said that the savings gap is a huge, social issue that doesn’t just affect Yorkshire, but added that the survey shows there are regional discrepancies.
He said that the financial services industry should provide better education on how to manage finances and prepare for the future.