- 25% of consumers to downsize homes, cars, holidays, education and marriage/family plans
- 64% say their purchasing power has reduced in two years
- 16% unable to cover finances for three months following job loss
- 10% of wealthy consumers going to Pound Shops
- 27% need a freeze on consumption taxes from The Budget
- Only 18% positive about long-term future
- 18% no longer saving any money
AXA's twice-yearly report presents a snapshot of financial confidence, behaviour and attitudes as well as views on topical money issues among eight demographic groups.
Already economising to the hilt, 25% of consumers admit they are now ‘in real danger of being forced to make major lifestyle changes in the next 12 months due to financial issues’, such as moving to a cheaper house, giving up a car, holiday or children's private education or even delaying marriage, children or retirement.
Indeed, just 18% felt their financial situation would improve in the long-term (rising to a happier 32% among the ever-buoyant younger working sectors of the population) with many consumers feeling forced to put the brakes on saving simply to survive. Almost one in five (18%) had stopped putting money into savings altogether by the end of 2012.
The impact is harsh: one in six (16%) of the UK's working population admit they would simply ‘not be able to cover’ their financial outgoings for the next three months if they lost their job today, while one in five got into more debt as they ‘simply could not survive without a large overdraft facility or credit card’.
Scrimping where they can, consumers looked to their household budgets and continued to cut back on the necessities. Even as winter hit, one in five (20%) cut back on using oil, gas and electricity, rising to 35% of Under-funded Seniors. When asked which ONE measure in the Chancellor's Budget this month would help them most, over a quarter (27%) of respondents chose a freeze on consumption taxes such as fuel duty.
More than one in five (22%) also cut back on food spending, which came close to doubling among The Stretched at 41%. Even the more affluent groups found themselves beginning to change their shopping habits, with more than one in 10 (11%) now going to Pound Shops.
Money (mis-) management: blame the parents?
Consumers felt there was a clear need for people to take more financial responsibility - and that parents should play a more prominent role in equipping them. Indeed, more than half (52%) of 25-34 year-olds said the reason for people struggling to stay afloat was not being taught money management skills by parents. Across all groups, 43% believed people are too disorganised and over a third (38%) blamed lack of money management teaching at school.