SBS’ Savings Barometer surveyed people across Scotland about their financial habits and attitudes amid persistent economic uncertainty. The latest data paints a concerning picture for many people as they assess their financial outlook for the year ahead.

Almost half of all respondents reported a decline in their savings over the past 12 months, with households continuing to grapple with rising costs.

While concerns were widespread, the data revealed particular pessimism among those aged 35 and under, which is unsurprising given both property prices and higher interest rates remain high. Indeed a significant 70% of 25–34 year-olds had to use their savings just to cover day-to-day costs.

More than 30% of people have either reduced or completely abandoned their savings goals this year. The generational divide is especially stark, with 80% of 16–24-year-olds having postponed or reduced their savings ambitions, compared to just 40% of those aged 65 and over.

Geographical differences also emerged, with savers in areas with below-average property prices more likely to have increased their savings. In contrast, those living in higher-priced regions have seen their savings impacted by elevated mortgage costs, often relying on their savings to mitigate this rising cost.

Paul Denton, chief executive of Scottish Building Society, said: “The Scottish Building Society Savings Barometer offers a vital snapshot of the personal finances of Scottish savers.

“The findings reveal widespread pessimism, with the majority of people having seen their savings take a hit in the past year and even more bracing for a tougher year ahead.

“When 75% of people say their finances have been negatively affected by current economic conditions, it’s no surprise confidence is low. Nearly 60% have dipped into their savings to cover rising costs in the last six months, underlining the real impact inflation is having on household budgets.”

The data suggests age is a key factor, with those aged 65 and over in a significantly stronger position than working-age individuals. A combination of inflation-linked pensions, lower exposure to rising mortgage rates and generally larger savings pots has created a two-tier financial landscape.

A third (33%) of over-65s reported no change to their savings in the last year – the highest of any age group.

Mr Denton continued: “We can’t ignore the role age plays in financial resilience, particularly during such a challenging time for the economy.

“Only 29% of those aged 16–24 were motivated by interest rates and product range when choosing a savings product, compared with 57% of those aged 65+.

“These figures suggest that the growing complexity of the savings market is making it even harder for young people to get ahead, underscoring the need for straightforward savings products and on the provision of financial education at a young age.”

While 40% of people managed to save something, it was less than they had planned, suggesting the appetite to save is there, but circumstances are making it difficult.

Mr Denton concluded: “Only 5% of people were able to save more than they had planned in the past year. Market conditions are constraining people’s ability to save despite a clear appetite to do so.

“It is vital that the UK government recognises these conditions and protects savers from additional tax constraints. In particular, the Cash ISA needs to be given protection from changes to give people the confidence to make sound long-term financial decisions.”