Financial Pessimism Spreads
Significant spending cutbacks are being implemented by many a cash-strapped Brit, new research reveals.
The research by AXA in their new Big Money Index shows 40 percent of consumers have made significant cutbacks to their spending since the end of last year.
This is an indication of a dramatic fall in financial confidence over the last 12 months across eight demographic groups. The index also reveals one in five regret some of their financial decisions they made prior the recession, and are not confident in investing in British shares.
A further one in four consumers has used their savings in the last quarter in order to make ends meet.
“These figures reveal a concerted effort by British consumers to claw back some financial security in the face of a significant drop in optimism that we found across all demographic groups.
“The result is that we are busy paying off debts, reining in unnecessary spending and clinging onto financial products to protect or grow our assets.”
The study confirms that those with the least money are feeling the most squeezed. With those who feel financially confident dropping from 23 percent to 16 percent in the period between quarter one in 2010 and the first quarter of 2011.
Older people’s optimism in particular has been dampened, with only seven percent feeling positive about their financial future compared to 19 percent at the beginning of 2010.
Forty percent of consumers chose to go out less between January and March this year and 48 percent of those in the most pessimistic group – the young professionals, cut back on going out.
Car use has also taken a hit as petrol prices continue upwards, with 27 percent of consumers reducing car usage in the first three months of the year, up 10 percentage points on the fourth quarter of last year, while a similar number say they are also cutting back on food shopping.