Three million fewer savers, investors or borrowers point to weaker prospects for financial services businesses compared to a year ago
Against a background of increasing pessimism about economic prospects as the effects of spending cuts and tax rises begin to bite, consumers intend to cut back on financial activity in the coming months.
The 35th quarterly JGFR UK Financial Activity Barometer, commissioned from GfK NOP, slipped to 92.3, its lowest level since March 2008 and down from 95.8 a year ago. Some 600,000 fewer consumers intend to undertake one or more savings, investment or borrowing activity, compared with last September and some 3 million fewer compared with a year ago.
Commented John Gilbert, Chief Executive of JGFR:
“The findings from the New Year 2011 Financial Activity Barometer reflect the difficult economic climate for many households with little spare cash. There is no easy option for savers, with interest rates staying low and inflation rising sharply. With job uncertainty increasing, repaying debt becomes the sensible option. At the same time there is no desire to take on greater risk through stock market or bond investment or invest in property at a time of falling house prices. For financial services businesses understanding where stronger pockets of product demand are to be found will be essential.”
Fewer adults (72.4%) intend to save, invest, borrow or repay debt in the next 6 months compared to September (73.1%) or a year ago (78.1%). This is the third successive quarterly fall in the JGFR UK Financial Activity Barometer, commissioned from GfK NOP. Over the last year there has been a fall of some 800,000 of the under 23s being financially engaged – which is likely to reflect rising youth unemployment. This quarter there is a noticeable drop in activity among 23-39 year olds as household incomes become more squeezed with less cash to save or invest. By contrast more people in the 40-64 age-group intend to be financially active - with more intending to pay into their pension.
To read the full news release sign in to the free Members area or if you want to discuss contact firstname.lastname@example.org or ring 0208 944 7510 / 07740 027968