Recession and poor economic outlook is not changing Brits’ entrenched financial habits, survey suggests

News - Banking

Written by Ray Clancy

Friday, 03 December 2010 09:21

Despite claiming they are more worried and insecure about their finances, Britons are proving to be resistant to changing their financial habits in response to the recent economic turmoil according to new research.

Some 76% say they are worried about the economy and their financial position and the same number feel less secure about their income yet the majority, 68%, have not altered their saving, borrowing or spending habits the survey from HSBC, one of the UK’s biggest savings providers, shows.

Women are more concerned than men. Some 80% said they are worried about finances and 78% said they felt insecure compared with 71% and 73% of men respectively but they are less likely to have changed their financial practices as a result.

The younger generation, those aged between 18 and 24, have been most affected by the recent turmoil with more than nine in ten, some 91%, saying they are worried about the economy and 80% saying they feel insecure about their future income.

‘With nearly eight in ten Britons worried and insecure regarding the current economic turmoil you would expect them to be spending and borrowing less and saving more. However, our research shows that only a minority have actually altered their financial habits. This suggests people either have their ‘heads in the sand’ and do not realise the need to change, or that they have simply decide to stoically ride out the recession by refusing to alter their ways,’ said Richard Brown, head of savings for HSBC.

They survey also shows that as a result of the recession, almost one in five, 19%, are saving less, while 14% claim they are saving more. However, for the remaining 67% their savings habits have remained unchanged.

Twice as many 18 to 24 year olds have changed their savings habits as those aged over 55. Some 57% of this age group have changed their savings practices with over a third, 34%, saving more, and a further 23% saving less as a result of the recession.

This is in stark contrast to the 28% of those aged over 55 who have altered their savings. Londoners are most likely to be savings more while those in the West Midlands are most likely of all regions to be saving less.

The nation’s attitude to spending has also remained largely unchanged. Just over a third, 34%, have changed their spending habits with 19% spending less and 15% spending more.

Women have curbed their spending far more then their male counterparts, with 21% saying they are spending less compared to 17% of men. Again, it is the younger generation which has been most affected with 26% of 18 to 24 year olds admitting they are now spending less as a result of the recent recession. The over 55’s however are bucking the trend with 17% claiming they are now spending more. People in the North East are most likely to be spending less while those in the East Midlands are most likely to be spending more.

Some 69% of Britons have not changed their borrowing habits as a result of the recession. Just over a quarter, 26%, are less inclined to borrow while just 5% say they have a higher inclination to borrow than before.

Those aged 45 to 54 are most likely to have reduced their inclination to borrow as a result of the economic downturn while those aged 18 to 24 are most willing to borrow more. People in the South West are also less inclined to borrow while 8% of those in the West Midlands say they are more willing to borrow money as a result of the recession.