Families are tightening their belts in tough economic times – with almost half of us expecting
our financial circumstances to worsen over the next six months.
Credit card debt is the main worry for more than half (56%) of families, while drivers are
putting the brakes on spending by keeping cars for longer and switching to more fuel efficient
models when they do trade their vehicles.
A survey by debt management group R3 found 57% of young adults aged under 34 were
concerned about their debts – especially credit card borrowing. This eased to one in four
(25%) of those aged 65 and over.
Almost 45% of people believe that their finances will worsen over the next six months – an
increase of 13% on the last quarter.
R3 president, Steven Law said: “Since we last carried out the survey, people have seen a
rise in the cost of living, from the VAT increase; to the rise of fuel and utility costs. This has
happened against a backdrop of pay freezes, pay cuts and, in some cases, redundancies, so it is
understandable that many are feeling pessimistic about their financial outlook.
“
The research shows that the number of people who are worried about their current level of
debt has increased by 6% in the last quarter, with close to half (45%) now concerned about
the amount of debt they owe.”
Research by The AA confirmed drivers are not keen to buy a new model.
Those planning to buy a car in the next 24 months will spend less than those who responded
to the survey last year. Drivers are more than three times more likely to save for their next
car, than take out a loan: nearly two-fifths (39%) saying they will use savings.
The findings suggest that car owners are hanging on to their existing cars for longer. Only a
third (33%) say they expect to buy a car within the next 24 months, compared with 42% last
year while two thirds (36%) say they ‘have no plans’ to change their car, compared with 28%
a year ago.
Fewer buyers say they will opt for a brand new car with only 19% saying that they plan to do
so; 2% fewer than last year.
