Scottish Widows reveals 'inadequate savings'

Scottish Widows is reminding people of the importance of having a substantial amount of money tucked away in the difficult financial climate, it has emerged.

People are being reminded of the importance of making adequate provision into saving accounts, it has been revealed.

Research by Scottish Widows indicates that 45 per cent of people claim they would use money from a savings account to help fund household spending if ill health or injury meant that they or their partner were unable to work for a period of six months or more.

However, the firm - which includes the Scottish Widow Investment Bonds and Scottish Widow ISA in its portfolio of products - reveals that such a reliance on savings may not last long.

Indeed, 63 per cent of those prepared to fall back on their savings have between £500 and £1,500 saved up. Meanwhile, 68 per cent are concerned about the impact the downturn will have on their ability to save money.

"The lack of protection coupled with people's tentative approach to saving in the current difficult economic climate could result in families and dependents taking radical steps to make ends meet if illness, accident or death affects the household income," Richard Jones, protection market director for Scottish Widows, states.

Meanwhile, Jane Baker wrote in a recent lovemoney.com article that those searching for a savings account should be aware that although some products provide attractive bonus rates, such offers will have expired within a year's time.

Written by Kate Guthrie