Almost half the region’s population is concerned about debt with more than a third significantly changing spending habits to combat the effects of the credit crunch according to new research by one of the country’s biggest banks.
The Financial Face of Britain report, by Lloyds TSB Consumer Banking, painted a gloomy picture of the region’s personal finances with people not only spending less but cutting back on saving for a rainy day with a fifth having less than £500 savings, second only to Scotland.
The report which is in the process of acquiring rival HBOS although its shares have suffered with the rest of the sector in recent days, found individuals in the West Midlands have some of the highest personal debt in the UK with an average of £2,906 compared to the national average of £2,771.
The report, which surveyed 5,000 people, found many have reassessed finances with 59 per cent taking action to clear their debt, compared to 55 per cent nationally.
The report also found one in ten people in the West Midlands do not have any savings whatsoever, which matches the total nationally, where over four million people are yet to get on the savings ladder. Nearly a third of people (31 per cent) do not save on a regular basis, with 52 per cent saying this is simply down to a lack of spare cash.
When it comes to saving, the reasons for doing so are varied. The majority of savers in the region say they are saving for emergencies. Nearly a third are saving up for holidays and 28 per cent are putting money away for retirement – the highest proportion across all the UK regions.
People in the region currently hold savings worth an average of £11,900, compared to the national average of £12,703. The Scots are the worst savers with an average stash of £9,939 and those in the South East are the country’s best with an average £15,493.
Steve Agg, local director, Lloyds TSB Birmingham said: “It has never been more important for people to save. Economic conditions are set to become more challenging and a healthy savings balance could prove to be a financial lifeline for some families during the economic storm.
“But, with rising bills it’s becoming harder to put money to one side. We all understand the need to save but what consumers told us they need is more guidance and advice on how to save more when their finances are being squeezed.”
Another report has painted an equally worrying picture stating that less than half of women who could be saving adequately for their retirement are doing so. Only 46 per cent of women are contributing enough to their pensions, compared to 55 per cent of men, out of those who could be saving enough.
This nine per cent “pensions gender gap” has narrowed from 13 per cent last year, according to the findings published by Scottish Widows.
But the pensions provider said the gap was still “too high” and a “dramatic shift in women’s attitudes” was needed.
Those who could be saving were defined as those aged between 30 and state pension age, earning at least £10,000 a year.
But the survey found 44 per cent of all women said they did not think they will ever save into a private pension and 60 per cent claimed they would be unlikely to save for the long term over the coming year as the credit crunch takes hold.