Savings slump as people admit that they can't cope with cuts
Savings in the South West have sunk to their lowest level since spring 2010 with, according to a financial advisor, the full effects of the Government's austerity measures beginning to make themselves felt.
Saving levels have slumped to just 6.2% of monthly income in the region, with more than a quarter of people admitting they do not save any money at all and 52% feeling they don't have enough to cope in an emergency.
The quarterly survey by the country's largest financial provider, NS & I, have showed that savings levels have fallen by almost 3% in some age groups since the end of 2012.
People aged 16-34 and over 65s tend to save most, while those aged 45-54, put away an average of 5.97% a month.
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Matthew Clark, a director at Seabrook Clark in Exeter said the full affects of Government austerity measures are only finally being met, with many focusing on paying off debt rather than spending.
"I think it's true a lot of working people who are struggling to save with mortgages, but a lot of retired people have a lot of cash still," he said.
"A lot of the cuts are only finally coming through now. Austerity was about three years ago, a lot of cuts have been coming through gradually, that's affecting a lot of people.
"We have seen this year the cuts are even affecting people earning £50,000. People earning quite a lot of money are experiencing cuts. I think also what's going on its that a lot of firms are giving people inflation pay rises. People's actual living standards have been falling.
"Inflation is a funny business. Where as the actual figures are showing 3%, we actually now that food is going up a lot more and so have bills. People aren't as comfortable with personal loans and buying cars. Instead of living in a never never land they are trying to pay off debt."
The survey estimates that in the last quarter savings have dropped by 1.3% on average.
Nick McBreen, an independent financial advisor based in Truro, at Worldwide Financial Planning, said: "The traditional Westcountry factors of low wages, high house prices means local people are behind the curve in things like earnings, cost of transport. Savings have always been behind in the same way as earnings. You can only save cash from disposable income, if your disposable income is low or next to nothing, you are not going to save.
"It's a factor of living down here, it's always been behind the game. I am not sure that's changing. They say that could change with things like superfast broadband but actually there's a lot of people earning around the national average or less. I think that will continue and I think it's going to get worse.
"I think the Treasury must think hard about incentivising people to save lots, have a good look at the tax system, how can you actually incentivise people to save for themselves. You could, for instance, give them tax breaks."