Table of Contents
Introduction
-
- Abbreviations
- Fieldwork methodology
Executive Summary
-
- Trends in lending
- Consumer credit lending increased in 2012
-
- Figure 1: Gross and net unsecured lending to individuals, January 2004-May 2013
- Mortgage lending remains flat in 2012
-
- Figure 2: Gross and net mortgage lending, 2007-12 (seasonally adjusted)
- Credit ownership
- Three quarters owe money on some form of credit
-
- Figure 3: Types of credit on which money is owed, April 2013
- Level of debt and appetite for credit
- A fifth are planning to use credit over the next 12 months
-
- Figure 4: Expected use of credit over the next 12 months, April 2013
- Most people are coping with their debts
-
- Figure 5: Level of outstanding unsecured debt, April 2013
- Two fifths have seen their debts increase over the last three years
-
- Figure 6: Change in debt levels over the last three years, April 2013
- Attitudes towards credit and debt
- Negative views of using credit persist
-
- Figure 7: Attitudes towards borrowing money and debt, April 2013
- Scope to expand money management and budgeting activities
-
- Figure 8: Consumer interest in using money management and budgeting tools, April 2013
- What we think
Issues in the Market
-
- Are consumers starting to feel more confident about borrowing?
- Who are the key targets for credit providers?
- How has credit ownership changed in the last two years?
- How comfortable are people with their existing debts?
- How interested are consumers in using money management and budgeting tools?
Trend Application
-
- A new approach to short-term finance
- Helping people to see positive uses for credit
- Generation Next will take a different approach to credit
Economic Outlook
-
- Key points
- Uncertainties continue to undermine the economic recovery…
-
- Figure 9: UK GDP, Q1 2008-Q1 2013
- … but there are some grounds for optimism
- Savings ratio falls in the first quarter of 2013
-
- Figure 10: Saving ratio, Q1 2007-Q1 2013
- Wage growth stagnation has eroded spending power
-
- Figure 11: RPI and weekly average earnings. 2008-13
- Unemployment rate stable at around 8%
-
- Figure 12: UK headline unemployment rate, 2007-13
Consumer Financial Wellbeing
-
- Key points
- Little change in consumer financial health
-
- Figure 13: Trend in consumer financial situation, June 2009- June 2013
- Most people are treading water…
-
- Figure 14: Trend in financial situation compared to a year ago, December 2011- June 2013
- … but are less anxious about the future
-
- Figure 15: Trends in consumer sentiment for the coming year, June 2009-June 2013
Consumer Credit Lending
-
- Key points
- Consumer credit lending continues to pick up
-
- Figure 16: Gross and net unsecured lending to individuals, January 2004-May 2013
- Credit card spending continues to edge upwards
-
- Figure 17: Gross and net credit card lending, 2006-12 (seasonally adjusted)
- Demand for other consumer credit begins to recover
-
- Figure 18: Gross and net other consumer credit lending (excluding student loans), 2006-12 (seasonally adjusted)
Mortgage Market Lending
-
- Key points
- Mortgage lending flat in 2012…
-
- Figure 19: Gross and net mortgage lending, 2007-12 (seasonally adjusted)
- … but some signs up an upturn in early 2013
- Housing equity withdrawal remains in negative territory
-
- Figure 20: Housing equity withdrawal, 2006-12
Write-offs, Repossessions and Arrears
-
- Key points
- Mortgage arrears and repossessions level off…
-
- Figure 21: Mortgage arrears and repossessions, Q1 2009-Q1 2013
- … but forbearance could be masking payment difficulties
- Interest-only time bomb
- Loan write-offs also on the decline
-
- Figure 22: Write-offs of loans to individuals, 2007-12
- Individual insolvencies in decline
-
- Figure 23: The number of individual insolvencies in England and Wales, by type, Q1 20043-Q1 2-13
Consumer Segmentation – Attitudes Towards Debt and Credit
-
- Key points
- Negative attitudes towards debt persist
-
- Figure 24: Attitudes towards borrowing money and debt, April 2013
- The financially secure more likely to acknowledge the positive uses of credit
- Dividing the online population by attitudes towards credit and debt
-
- Figure 25: Consumer segmentation, April 2013
- Sophisticated financial planners
- 32% of online population
- Demographic traits
- Marketing perspective
- Concerned but responsible credit users
- 37% of online population
- Demographic traits
- Marketing perspective
- Anti-credit critics
- 14% of online population
- Demographic traits
- Marketing perspective
- Inattentive credit users
- 17% of the online population
- Demographic traits
- Marketing perspective
-
- Figure 26: Agreement with attitudes towards borrowing money and debt, by consumer segmentation, April 2013
Credit Ownership
-
- Key points
- Most people owe money on some form of credit
-
- Figure 27: Types of credit on which money is owed, 2011- 13
- Indications that more people are using consumer credit
- Payday loans are gaining traction in the consumer credit market…
- … but are facing growing scrutiny and regulatory intervention
- Inattentive credit users are more likely to use payday loans
-
- Figure 28: Types of credit on which money is owed, by consumer typologies, April 2013
- More than a quarter owe money on three or more types of credit
-
- Figure 29: Number of different types of credit on which money is owed, April 2013
- Figure 30: Types of credit on which money is owed, by number of types of credit on which money is owed, April 2013
- Multi-credit users are more likely to spend money without worrying
-
- Figure 31: Agreement with attitudes towards borrowing money and debt, by number of different types of credit on which money is owed, April 2013
Level of Outstanding Unsecured Credit
-
- Key points
- Unsecured debt balances – some movement at the margins
-
- Figure 32: Level of outstanding unsecured debt, 2011-13
- Most unsecured credit borrowers are managing their debts
-
- Figure 33: Current financial position by the level of outstanding unsecured debt, April 2013
- Unsecured debts are higher among mortgage holders
- Higher borrowers are more likely to see use of credit as acceptable
-
- Figure 34: Agreement with attitudes towards borrowing money and debt, by level of outstanding unsecured debt, April 2013
Change in Personal Debt Levels
-
- Key points
- Nearly two fifths have increased debts over the last three years
-
- Figure 35: Change in debt levels over the last three years, April 2013
- Who has taken on debt?
- And who has reduced their debt burden?
- Reducing debt and improving financial well-being
-
- Figure 36: Change in debt levels over the last three years, by financial situation compared to a year ago, April 2013
- Impetus to reduce debts across the spectrum of credit balances
-
- Figure 37: Change in debt levels over the last three years, by level of outstanding unsecured debt, April 2013
Level of Comfort with Personal Debt
-
- Key points
- Half of all credit holders are comfortable with their debts
-
- Figure 38: Level of comfort with level of debt, April 2013
- Anxiety increases among those with unsecured debts of more than £3,000
-
- Figure 39: Level of comfort with level of debt, by level of outstanding unsecured debt, April 2013
- Escalating debts also lead to increased discomfort
-
- Figure 40: Level of comfort with level of debt, by change in debt levels over the last three years, April 2013
- Multi-credit holders are more likely to have concerns over debts
-
- Figure 41: Level of comfort with level of debt, by number of different types of credit on which money is owed, April 2013
- Sophisticated credit users are the most comfortable with debts
-
- Figure 42: Level of comfort with level of debt, by consumer segmentation, April 2013
Appetite for Borrowing/Using Credit
-
- Key points
- A fifth expect to use credit over the next 12 months
-
- Figure 43: Expected use of credit over the next 12 months, April 2013
- Under-35s are much more likely to be planning to borrow money in the next year
-
- Figure 44: People who expect to use credit in the next 12 months, by age group, April 2013
- Most expected borrowers already have unsecured debts
-
- Figure 45: Types of credit on which money is owed, by expected use of credit over the next 12 months, April 2013
- Expected borrowers have average levels of unsecured debt
-
- Figure 46: Level of outstanding unsecured debt, by expected use of credit over the next 12 months, April 2013
-
- Figure 47: Expected use of credit over the next 12 months, by number of different types of credit on which money is owed, April 2013
- Sophisticated financial planners are the most open to borrowing in the next year
-
- Figure 48: Expected use of credit over the next 12 months, by target groups, April 2013
Use of and Interest in Money Management Services
-
- Key points
- Accessing credit file tops list of money management activities undertaken…
-
- Figure 49: Consumer usage of selected money management and budgeting tools, April 2013
- … but credit providers face a challenge to gain repeat business
-
- Figure 50: Proportion of users of selected money management and budgeting tools who would and wouldn’t use the service in future, April 2013
- Online budgeting tools are growing in popularity
- 50% are interested in using money management tools from their bank
-
- Figure 51: Consumer interest in using money management and budgeting tools, April 2013
-
- Figure 52: Interest in using online money management/budgeting tools, by age group, April 2013
- Keeping young adults engaged is the challenge for providers of budgeting tools
- Role of face-to-face debt advice should not be overlooked
Appendix – Consumer Segmentation – Attitudes Towards Debt and Credit
-
-
- Figure 53: Agreement with the statements ‘I don’t like the idea of being in debt’ and ‘It is irresponsible to rely on credit’, by demographics, April 2013
-
- Figure 54: Agreement with the statements ‘Borrowing money should be a last resort’ and ‘It is better to save up for something rather than rely on credit’, by demographics, April 2013
-
- Figure 55: Agreement with the statements ‘Borrowing money can be a useful way to protect savings’ and ‘I tend to spend money now and worry about it later’, by demographics, April 2013
-
- Figure 56: Agreement with the statements ‘I like to keep a close eye on my finances’ and ‘Using credit is acceptable on some occasions’, by demographics, April 2013
-
- Figure 57: Agreement with the statements ‘It makes sense to use credit cards to pay for large purchases’ and ‘Credit can offer more flexibility when managing household finances’, by demographics, April 2013
- Consumer Segmentation
-
- Figure 58: Consumer Segmentation, by demographics, April 2013
-
- Figure 59: Expected use of credit over the next 12 months, by consumer segmentation, April 2013
-
Appendix – Credit Ownership
-
-
- Figure 60: Types of credit on which money is owed, by demographics, April 2013
- Figure 61: Types of credit on which money is owed, by demographics, April 2013 (continued)
-
- Figure 62: Types of credit on which money is owed, by demographics, April 2013 (continued)
- Figure 63: Number of different types of credit on which money is owed, by demographics, April 2013
-
Appendix – Level of Outstanding Unsecured Credit
-
-
- Figure 64: Level of outstanding unsecured debt, by demographics, April 2013
- Figure 65: Level of outstanding unsecured debt, by demographics, April 2013 (continued)
-
- Figure 66: Types of credit on which money is owed, by level of outstanding unsecured debt, April 2013
- Figure 67: Level of outstanding unsecured debt, by number of different types of credit on which money is owed, April 2013
-
Appendix – Change in Personal Debt Levels
-
-
- Figure 68: Change in debt levels over the last three years, by demographics, April 2013
- Figure 69: Types of credit on which money is owed, by change in debt levels over the last three years, April 2013
-
- Figure 70: Change in debt levels over the last three years, by number of different types of credit on which money is owed, April 2013
-
Appendix – Level of Comfort with Personal Debt
-
-
- Figure 71: Level of comfort with level of debt, by demographics, April 2013
- Figure 72: Level of comfort with level of debt, by demographics, April 2013 (continued)
-
- Figure 73: Types of credit on which money is owed, by level of comfort with level of debt, April 2013
- Figure 74: Types of credit on which money is owed, by level of comfort with level of debt, April 2013 (continued)
-
Appendix – Appetite for Borrowing/Using Credit
-
-
- Figure 75: Expected use of credit over the next 12 months, by demographics, April 2013
-
Appendix – Use of and Interest in Money Management Services
-
-
- Figure 76: Usage of and appetite for money management and budgeting tools, April 2013
- Figure 77: Usage of and appetite for money management and budgeting tools, by level of comfort with level of debt, April 2013
- Figure 78: Usage of and appetite for regular access to your credit report/file, by demographics, April 2013
-
- Figure 79: Usage of and appetite for one-off access to your credit report/file, by demographics, April 2013
- Figure 80: Usage of and appetite for online money management/budgeting tool (from your bank), by demographics, April 2013
-
- Figure 81: Usage of and appetite for online money management/budgeting tool (not from your bank), by demographics, April 2013
- Figure 82: Usage of and appetite for advice from a debt counselling service, by demographics, April 2013
-
- Figure 83: Usage of and appetite for face-to-face advice about money management and budgeting from your bank/building society, by demographics, April 2013
- Figure 84: Usage of and appetite for mobile apps for money management/budgeting, by demographics, April 2013
-
- Figure 85: Usage of and appetite for money management classes or workshops, by demographics, April 2013
- Figure 86: Usage of and appetite for peer-to-peer advice such as online discussion boards, by demographics, April 2013
-
Back to top