FAMILIES in Scotland are saving less than half of what they were a year ago as increasing numbers attempt to pay off debt instead.

New figures reveal households north of the Border are now saving just £23 a month, compared to £52 last year.

The latest Family Finances Report from insurance firm Aviva shows that, as a result, typical Scottish savings are down to £717 – more than £400 below the UK average of £1131.

However, it is not all bad news as the report also reveals this can be linked to Scots becoming increasingly diligent with their debt repayments, with typical Scottish household debt at £4712 compared to the UK average of £10,563.

Louise Colley, head of protection sales and marketing at the insurance firm, said: "Savings have taken a drastic hit in Scotland this month.

"While this is unsurprising considering the fall in monthly income, it is concerning that the amount being saved has more than halved to just £23 a month.

"Money that might otherwise be put away in a nest egg appears to be directed at paying off debt, which on a more positive note is far less in Scotland compared to the rest of the nation. However, we would urge that where possible savings levels are maintained to soften the blow should an unexpected expense arise."

The report also shows the average monthly net income for a family in Scotland is £1833.

This is lower than in August last year when it was £1952 and £170 below the British average of £2003.

The most common source of income is from a primary earner (75%), followed by income from a spouse's job (30%). More than one-quarter of Scottish families also cite benefits as a source of income.

Households spend the largest proportion of their income on housing (18%), while more is being spent on debt repayment (12%) than food (11%). Just 36% of Scots have credit cards, compared to the south-west of England where 52% have them.

Around 11% of families own their home outright, while 46% have a mortgage. It comes as more people are taking advantage of the current record low interest rates to pay off their mortgages.

However, many savers are being dissuaded from keeping cash in Isas and other savings accounts by the poor rates of return.

The Aviva study revealed 19% of Scots rent their homes – 3% lower than the UK average for renters.

House prices in Scotland are among the lowest in the UK, with the average family home worth £176,042, compared to the UK average of £210,620. However, property prices have risen by 3.7% over the past year, up from an average of £169,684 in August 2011.

Two-thirds (67%) of people revealed they have lived with their parents or grandparents past the age of 18, compared to the national average of 73%.

Around 23% stay with their families for between two and five years, while 14% stay for more than 10 years and 12% are able to leave after a month.

More than 14,000 people were interviewed between December 2011 and July 2012 for the study, which showed that across the whole of the UK, the biggest fears facing families are the loss of jobs (47%) and unexpected expenses, such as major house repairs (43%).

However, as inflation has receded, worries about the cost of necessities has also dropped by 6%.

Meanwhile, another survey has suggested UK families are actually £1 a week better off than they were a year ago.

The monthly tracker by the Centre for Economics and Business Research for Asda found households have £151 a week left over after paying essential bills in July, the highest amount of discretionary income recorded in 16 months.

However, the pressure on family budgets could increase in the coming months as weaknesses in the labour market and wider economic uncertainty continue to take a toll the report warned.

Rises in the cost of living were driven by hefty hikes in air fares, while there were fewer discounts from retailers who had already slashed prices to shift stock amid the wet weather.