Thrifty Scots urged to become investors as well as savers

They are being urged to "step out of cash" and put their thrifty savings to work better.

The annual worldwide 'investor pulse' survey by Blackrock published today reveals: "Parents in Scotland are doing more to teach their children about money and savings early in life compared to the average European, but are keeping too much of their savings in cash rather than putting that money to work."

It goes on: "Scots are more prepared for retirement than the average European, but are less confident they will achieve their desired retirement pot, with 60 per cent worried they won't be able to live comfortably."

The survey underlines the traditional Scottish virtue of thrift, discovering that in Scotland more than any other European nation parents teach their kids good financial habits.

It found 55per cent of Scots open a child savings account (39per cent in Europe), 45per cent give piggy banks (36per cent in the UK, 32per cent in Europe) 36per cent give regular pocket money (33per cent and 30per cent) and 33per cent financially reward children for good behaviour and doping household chores (30per cent and 22per cent).

Blackrock says: "Perhaps as a result of this deeply ingrained savings culture, Scots are holding almost twice as much of their savings in cash (65per cent) than they believe they should be (34per cent). Yet despite this acknowledgment, over half (51per cent) say they are likely to increase their cash savings in the next 12 months even with the current woeful savings rates. This is a significantly higher amount compared to the European average of 35per cent."

When asked why they held so much cash, 50per cent cited flexibility and 41per cent safety.

"Perhaps most surprising of all, 15per cent of Scots hold savings in cash as they believe it never loses its value. A worrisome statistic when you consider that £1000 held over the last five years would now have the spending power of £853."

The most financially challenged age group in Scotland is the 45-55s, with 27per cent not feeling in control of their finances and 25per cent not confident they are making the right savings and investment decisions.

Scots underestimate how much they will need to meet their desired retirement income, typically £20,000. The average guess was a pension pot of £286,000, when the reality is £400,000.

Tony Stenning, head of UK retail at BlackRock, said: "I think it's really interesting that so many Scots are canny and more of them are encouraged to put money in a piggy bank.

"Having a cash safety net and being able to afford things without using credit are key factors to making Scots feel more in control of their financial future. It's perhaps unsurprising then that Scots tend to hold a large portion of their savings and investments in cash. But it also stores up a bit of a challenge in later life."

He went on: "With savings rates at all-time lows, perhaps it's time for people to take a step out of cash and make their savings work harder to provide a stable income in retirement. People are living longer and with 60per cent of Scottish people concerned they won't be able to live comfortably in retirement, now may be the time for Scottish people to move from being savers to investors."

Currently only one in six (16per cent) Scots uses a financial adviser, according to the survey. Those that do are much more likely to be saving for retirement (84per cent against 54per cent), and tend to hold significantly less cash (39per cent against 71per cent). The survey also revealed what advice Scots would give to their younger self when it comes to savings and investments. Top of their list was to start saving for retirement at a younger age (54per cent) followed by saving more generally (46per cent), pay off debts sooner (33per cent) and think long-term with savings and investments (31per cent).

On how people could "step out of cash", with so few apparently prepared to pay for advice, Mr Stenning said it was a case of spreading their investments, and seeking a way of drawing a regular income from their capital, which could then be reinvested and keep working. "If you do that you don't have to take an awful lot of risk in your portfolio. Taking gradual steps, you can build a pot and hopefully start to see compounding self-perpetuate and build it up over a number of years."

The reforms to pensions meant there were now "lots of platforms with areas where if you are a little bit uncertain you can ask a lot of questions and it will nudge you along", as well as beefed-up guidance services at Citizens Advice and the Money Advice Service.

Meanwhile UK investors will soon have the opportunity to invest their money in a pioneering Scottish fund which aims to provide a social, as well as financial, return on investment.

SIS Community Capital has been developed by Social Investment Scotland, the leading lender to the voluntary sector. It will allow individuals to invest in a fund which provides tax relief but also helps to support the creation and growth of "charities, community organisations and social enterprises that have the capability to make sustainable social and environmental impacts".

Scheduled to launch in May, SIS is aiming to attract an initial tranche of up to £500,000 investment from UK-based investors. The money will be used to support between five and ten social enterprises in Scotland. Tax relief for investors will be provided in the form of a 30per cent relief on their investment from their income tax liability.