Financial squeeze could lead more to seek debt advice

16/12/2009

Recession-fearing consumers cut their spending last month and the frugal habits might only begin to ease in 2010, market researchers BDRC have claimed.

A report from the organisation showed that 33 per cent of UK adults are currently feeling financial "adversity" as the economic downturn drags on.

Around a fifth (19 per cent) also said that they would experience hard times over the 12 months ahead, potentially leading them to look for debt help.

Discretionary spending analysis from BDRC also revealed that over half of consumers were "cautious" with their spending last month - with much of the cutbacks coming with high-cost goods and services such as gym memberships and sports tickets.

Tony Wornell, director of the organisation, said: "Between March and September we saw a growing willingness among consumers to spend on entertainment, holidays and memberships as fewer people feared they would lose their jobs or suffer a fall in income in the year ahead.

"The greater restraint we have seen in November is probably seasonal, as consumers switch their spending focus to coping with Christmas.

Kevin Still, EuroDebt director, added: "Recent rises in inflation and tangible increase in fuel costs and insurance premiums should be enough evidence to suggest that we are not out of the woods, especially with interest rates held at an all time low. EuroDebt believe that it is sensible to review discretionary spending, like gym memberships, if you have money worries.

"We are still seeing level of unsecured debt rising, as EuroDebt probably provides debt advice to those people who have felt they had to use credit and store cards just to make ends meet, resulting in a 'debt spiral'."

The UK has been in recession since the second half of 2008, making the present economic downturn the longest on record.

Tags; Income Worries and Debt, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

• Share
• 
• 
• Store
• 
• Follow
•