It's well-known that the credit crunch and rapidly rising costs of living are affecting spending power, as well as the ability to obtain credit - but what about the other side of the coin? According to a new report from Scottish Widows, one in three UK citizens feel they can no longer afford to put aside any savings for the future.

The survey of 6,381 people, carried out by YouGov, also showed that half were not saving enough for a comfortable life after retirement.

Why are so many people 'unable' to save?

The report suggests that the credit crunch is encouraging more people to save rather than spend their money. But for those on lower salaries or with bigger commitments, it can actually limit people's ability to save. "Rising costs of living are a constant pressure on people's finances," says a spokesperson for debt management company Gregory Pennington, "and this means many people are left with very little once bills and other commitments have been paid."

The rising numbers of people in debt may also have an impact. "We're seeing increasing numbers of people struggling with debt, which automatically shifts priorities away from saving money," he says. "A few years of easy access to credit cards, loans, et cetera, are starting to take their toll."

But are we really unable to save?

The spokesperson for Gregory Pennington says that many people may underestimate their ability to save. "A lot of people are hesitant about saving these days, because they never know when their costs will go up and they might need the money.

"People often feel that once they've got their bills and other essentials out of the way, which are rising all the time, they are entitled to spend whatever's left.

"Rising costs of living are limiting what people are able to save, but the truth is that most people are able to save at least something - and even a small amount each month is worthwhile." There are plenty of ways to cut costs without compromising lifestyle, he continues - changing utility/telephone/broadband providers, for example - and the money saved can be put aside for the future.

"Even a few minor compromises can make all the difference," he says. "Cycling to work instead of taking the car or bus, buying fewer CDs and DVDs, or only buying clothing when it's needed - all of these can make a difference".

"Life would be no fun without these things, but it doesn't take a lot to save. Buying one less shirt a month, for example, could save you around £20 a month, which is a perfectly good amount to start out on.

"It doesn't sound a lot at the time, but over a year that's £240 plus interest. In a good savings account, that could really add up over the years," he says.

"There's a snowball effect with savings. The more you have in your account, the more you will get back in interest, so you could find your money growing faster than you think. We would recommend anyone to get saving as early as possible to give themselves the best possible start."