Consumers slash their spending amid fears of a plummeting economy, says Trust Deed Scotland
Consumers are tightening their belt and slashing household luxuries amid fears of job insecurity and a plummeting economy, says debt solutions company; Trust Deed Scotland.
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.”
In the past, cable TV and mobiles have been the first luxury to be slashed by cash-strapped consumers, but now they appear to be firm favourites. Over 20% of existing cable TV users have increased their spending while only a handful of people cut spending on phones than increased it.
In contrast a third of consumers have reduced their trips to the cinema, while restaurants have seen just over half of us cut back on eating out. That luxury coffee ‘on the run’ has also fallen victim as over half of us have cut back on our lattes and cappuccinos.
A spokesperson for Debt Solutions Company Trust Deed Scotland , 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.”
And uncertain these groups certainly are. The survey revealed that a quarter of people in the UK feel their jobs are less secure than they were a month ago, with half expecting themselves to be in a worse financial position in 12 months time. The survey respondents also felt that they would be struggling to afford the rising prices of goods in 12 months time while almost 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 Trust Deeds and Debt Management Plans. 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,” concluded the spokesperson.
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