Table of Contents
Issues in the Market
-
- Key issues for desk research
- Abbreviations
Future Opportunities
-
- Helping consumers to visualise the impact of debt
- Educating the young about debt and money management
Market in Brief
-
- Household debt continues to plateau
-
- Figure 1: Outstanding lending to individuals, Q1 1993-Q1 2010
- Mortgage lending falls by 43% in 2009
- Demand for consumer credit remains weak
- Most people are getting by
-
- Figure 2: Statements describing current financial situation, April 2010
- Credit ownership – financial strugglers more likely to have unsecured debt
-
- Figure 3: Type of credit on which money is currently owed, April 2010
- Only a minority admit to being financially disorganised
-
- Figure 4: Statements on financial management, April 2010
- Consumers divided over the impact of the recession on spending
-
- Figure 5: Statements on the impact of the recession on attitudes towards saving, spending and managing money, April 2010
Household Debt in Context
-
- Key points
- Level of outstanding debt begins to plateau
-
- Figure 6: Outstanding lending to individuals, Q1 1993-Q1 2010
- Unsecured debt balances have fallen in recent months
-
- Figure 7: Growth in outstanding lending to individuals, Q1 2003-Q1 2010
- The burden of debt
-
- Figure 8: Outstanding lending to individuals as a proportion of PDI, 1993-2009
The Changing Economic Environment
-
- Key points
- Tentative signs of economic recovery
-
- Figure 9: GDP quarterly percentage change, Q1 2004-Q1 2010
- Unemployment begins to slow…
-
- Figure 10: Number of unemployed people, Q1 1993-Q1 2010
- …but the outlook remains uncertain
- Bank rate helps to insulate consumers from recessionary pressures
-
- Figure 11: Bank of England base rate, three-month LIBOR and effective rate on new mortgages, January 2007-April 2010
Consumer Context – The Changing Economic Environment
-
- Key points
- Debt repayment remains a financial priority
-
- Figure 12: Savings, investment, borrowing and debt repayment – consumers’ expected financial activity, quarterly indices, June 2002-March 2010
- Taking a more cautious approach to expenditure
-
- Figure 13: Changing attitudes towards money management, 2005-09
- A growing number are feeling the effects of the downturn…
-
- Figure 14: The impact of the economic downturn on consumers, April 2009-April 2010
- …but most remain positive about their prospects for the coming year
-
- Figure 15: Trends in consumer sentiment for the coming year, April 2009-April 2010
The Over-Extended Consumer
-
- Key points
- Write-offs increase in 2009
-
- Figure 16: Quarterly write-offs of lending to individuals, May 2004-December 2009
- Mortgage arrears cases peaked in mid-2009
-
- Figure 17: Number of residential loan accounts to individuals in arrears, Q3 2008-Q1 2010
- Repossessions peak in Q1 2009
-
- Figure 18: Number of new possession cases, Q3 2008-Q1 2010
- Insolvency cases begin to level off
-
- Figure 19: Individual insolvencies in England and Wales, by quarter, Q1 2004-Q1 2010 (not seasonally adjusted)
- Helping the indebted
- New schemes launched to ease the pressure of debt
- Consumer Credit Directive – greater protection for consumers
- New rules on credit and store cards
The Mortgage Market
-
- Key points
- Gross mortgage lending falls by 43% in 2009
-
- Figure 20: Gross and net mortgage lending, January 2004-March 2010 (not seasonally adjusted)
- Housing equity withdrawal remains in negative territory
-
- Figure 21: Housing equity withdrawal (not seasonally adjusted), 1999-2009
- Consumer confidence beginning to return to housing sector…
-
- Figure 22: Expected house price movement over the next year, 2007-09
- …but mortgage demand remains weak
-
- Figure 23: Expected mortgage and property purchase activity, Q3/Q4 2002-Q1/Q2 2010
Consumer Credit
-
- Key points
- Demand for consumer credit continues to decline
-
- Figure 24: Intended consumer credit activities, Q3/Q4 2002-Q1/Q2 2010
- Gross credit card lending holds up despite the recession…
-
- Figure 25: Gross and net credit card lending, 2005-10 (not seasonally adjusted)
- …but appetite for other forms of consumer credit falls
-
- Figure 26: Gross and net consumer credit (excluding credit card lending), 2005-10 (not seasonally adjusted)
The Consumer – Financial Situation
-
- Key points
- Note on consumer research
- Only a minority are experiencing financial difficulty
-
- Figure 27: Statements describing current financial situation, April 2010
- Young adults are more likely to struggle with debt
-
- Figure 28: Current financial situation, by gender, age and lifestage, April 2010
- Family budgets also feel the strain
- Older age groups enjoy a healthier financial picture
- Income is the main determinant of financial security
-
- Figure 29: Current financial situation, by socio-economic group and gross household income, April 2010
The Consumer – Credit Ownership
-
- Key points
- More than half of the population have some form of debt
-
- Figure 30: Type of credit on which money is currently owed, April 2010
- Three in ten rely on more than one source of credit
-
- Figure 31: Repertoire of type of credit on which money is owed, April 2010
-
- Figure 32: Type of credit on which money is owed, by repertoire of type of credit on which money is owed, April 2010
- Families are the most likely to rely on unsecured debt
-
- Figure 33: Outstanding credit, by gender, age and lifestage, April 2010
- The most affluent are the most likely to use credit
-
- Figure 34: Outstanding credit, by socio-economic group, gross household income and housing tenure, April 2010
- Unsecured debt contributes to financial difficulties
-
- Figure 35: Type of credit on which money is owed, by statements describing current financial situation, April 2010
The Consumer – Level of Unsecured Debt
-
- Key points
- Most unsecured debt is below £5,000
-
- Figure 36: Amount owed on unsecured borrowings, April 2010
-
- Figure 37: Type of credit on which money is owed, by amount owed on unsecured borrowings, April 2010
- Levels of unsecured debt impact financial health
-
- Figure 38: Statements describing current financial situation, by amount owed on unsecured borrowings, April 2010
- Affluent are more likely to have higher amounts of debt
-
- Figure 39: Amount owed on unsecured borrowings, by gender, age, socio-economic group, lifestage and household income, April 2010
The Consumer – Level of Secured Debt
-
- Key points
- Half of all mortgage borrowers owe more than £100,000
-
- Figure 40: Outstanding balance on mortgage and/or homeowner loan, April 2010
- Mortgage debt does not necessarily contribute to financial hardship
-
- Figure 41: Statements describing current financial situation, by outstanding balance on mortgage and/or homeowner loan, April 2010
- Usage of consumer credit is higher among those with £150K of mortgage debt
-
- Figure 42: Type of credit on which money is owed, by outstanding balance on mortgage and/or homeowner loan, April 2010
- Income determines level of mortgage debt
-
- Figure 43: Outstanding balance on mortgage and/or homeowner loan, by gender, age, socio-economic group, lifestage, gross household income and region, April 2010
The Consumer – Money Management
-
- Key points
- Two fifths are confident about their money management skills
-
- Figure 44: Statements on financial management, April 2010
- Older and more affluent consumers tend to be more prudent
-
- Figure 45: Key demogrpahics for statements about financial management, April 2010
- Money management skills influence financial health
-
- Figure 46: Statements on financial management, by statements describing current financial situation, April 2010
- High levels of unsecured debt undermine ability to save…
-
- Figure 47: Statements on financial management, by amount owed on unsecured borrowings, April 2010
- …but the impact of mortgage debt is less clear-cut
-
- Figure 48: Statements on financial management, by outstanding balance on mortgage and/or homeowner loan, April 2010
- Money management attitudes differ by types of credit held
-
- Figure 49: Statements on financial management, by ownership of selected credit produtcs, April 2010
The Consumer – Money Management and the Impact of the Recession
-
- Key points
- Consumers spilt over the impact of the recession on personal finances
-
- Figure 50: Statements on the impact of the recession on attitudes towards saving, spending and managing money, April 2010
- Seeking a financial safety net
-
- Figure 51: Statements on the impact of the recession on attitudes towards saving, spending and managing money, by statements describing current financial situation, April 2010
- Recession has a positive impact for the finances of affluent families and couples
-
- Figure 52: Key demographics for statements about the impact of the recession on attitudes towards saving, spending and managing money, April 2010
- Mortgage and credit card holders adopt a cautious approach
-
- Figure 53: Statements on the impact of the recession on attitudes towards saving, spending and managing money, by ownership of selected credit products, April 2010
-
- Figure 54: Statements on the impact of the recession on attitudes towards saving, spending and managing money, by repertoire of type of credit on which money is owed, April 2010
- Financial discipline is engrained behaviour for some prudent consumers
-
- Figure 55: Statements on the impact of the recession on attitudes towards saving, spending and managing money, by most popular statements on financial management, April 2010
- A difficult lesson to learn?
-
- Figure 56: Statements on the impact of the recession on attitudes towards saving, spending and managing money, by next most popular statements on financial management, April 2010
The Consumer – Segmenting the Population
-
- Key points
- Only a minority are struggling with debt levels
-
- Figure 57: Financial management and impact of the recession target groups, April 2010
-
- Figure 58: Statements on financial management/impact of the recession on attitudes towards saving, spending and managing money, by target groups, April 2010
- Different perspectives on using debt
-
- Figure 59: Statements describing current financial situation, by target groups, April 2010
- Reducing reliance on unsecured credit
-
- Figure 60: Type of credit on which money is owed, by target groups, April 2010
Appendix – The Consumer – Financial Situation
-
-
- Figure 61: Statements describing current financial situation, by demographics, April 2010
-
Appendix – The Consumer – Credit Ownership
-
-
- Figure 62: Most popular type of credit on which money is owed, by demographics, April 2010
-
- Figure 63: Next most popular type of credit on which money is owed, by demographics, April 2010
-
Appendix – The Consumer – Level of Unsecured Debt
-
-
- Figure 64: Amount owed on unsecured borrowings, by demographics, April 2010
-
Appendix – The Consumer – Level of Secured Debt
-
-
- Figure 65: Outstanding balance on mortgage and/or homeowner loan, by demographics, April 2010
-
Appendix – The Consumer – Money Management
-
-
- Figure 66: Most popular statements on financial management, by demographics, April 2010
-
- Figure 67: Next most popular statements on financial management, by demographics, April 2010
-
Appendix – The Consumer – Money Management and the Impact of the Recession
-
-
- Figure 68: Statements on the impact of the recession on attitudes towards saving, spending and managing money, by demographics, April 2010
-
Appendix – The Consumer – Segmenting the Population
-
-
- Figure 69: Target groups, by demographics, April 2010
-
Back to top