A plummeting economy sparks consumers cutting their spending, says Trust Deed Company
Household luxuries are being slashed by fearful consumers amid concerns of a plummeting economy and job insecurity, says Scottish Trust Deed Company.
Mike Nardis, Senior Vice President of Investment Products at YouGov, said: “Consumer spending behaviour in the past 12 months has shown where our priorities lie: staying in and staying in touch are valued and worth our hard earned cash, but going out for meals, to clubs and bars, buying clothes and shoes and even stopping at the coffee shop are all off the menu. The outlook for the next 12 month is equally bleak.”
Cash-strapped consumers have chosen to keep hold of their cable TV subscriptions and mobiles, two items which traditionally have been the first luxury to be slashed from the family budget. Spending has increased by over 20% on cable TV while only a handful of people cut spending on phones than increased it.
In contrast cinemas, restaurants, pubs and bars, and coffee houses have been either cut out of budgets or spending vastly reduced. A third of cinema goers have cut down on the frequency of their visits while half of us have significantly reduced our restaurant and pub spending. That luxury coffee ‘on the run’ has also fallen victim - over half of us have are either forgoing our lattes and cappuccinos or making our own.
A spokesperson for Scottish Trust Deed commented, and is pleased that staying in the ‘new’ going out. “The Bloomberg//YouGov survey shows that it is the 35-54 year olds, those earning under £30,000 and parents with children who have significantly changed their spending patterns. These are traditionally the groups that carry the most amount of debt, so it is good to see they are taking action to reduce their spending – and hopefully pay down more of their debt - at a time of economic uncertainty.”
The plunging economy has been blamed for the change in consumer spending patterns. A quarter of people in the UK feel their jobs are less secure than they were just 30 days ago and half of the respondents of Bloomberg//YouGov survey were expecting to be in a worse financial position in 12 months time than they were now. The survey respondents also felt that they would struggle with future price rises of goods and 30% believed they would see a drop in value of their property.
“Being careful what you spend your money on in the coming uncertain months is a good thing,” said the spokesperson. “Now is the time to practice good money management and how to budget your money on what really matters, like family and the home. Too many people are forced into budgeting and cut backs when their debts become unaffordable and they face serious financial solutions like a Trust Deed and a Debt Arrangement Scheme. That can often be too little too late. Doing it now before it is desperately needed puts you on a much stronger financial footing to deal with any problems that lie ahead.”
“But it’s important not to become so penny-pinching it makes you and your family miserable! The occasional meal out to celebrate a birthday or happy occasion is a good thing and a budget can help you set aside the money and save up for these special occasions.”
“Finally, if you make financial cutbacks and you still cannot make ends meet, take advice from experts as soon as possible before you increase your debts, or default on your payments and creditors start knocking. Scottish Trust Deed has expert, knowledgeable advisers who can run through your options with you and help you decide on the best way to meet your future financial challenges,”
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