Britons are taking a prudent but matter-of-fact approach to the economic downturn, according to a new report conducted by Norwich Union, soon to be Aviva.
- Norwich Union report highlights what we are doing with our money now
Britons are taking a prudent but matter-of-fact approach to the economic downturn, according to a new report conducted by Norwich Union, soon to be Aviva.
Four in five people (81%) have altered their spending habits during the recession, with three quarters (75%) saying they are more frugal with their finances as a result.
Almost half (44%) say they now set themselves a budget, one in three (33%) have stopped relying on credit and a similar number (35%) are focussing on tackling their debts. One in five (20%) say they are actually saving more.
In a bid to tighten their purse strings, nearly three quarters (71%) are opting for cheaper brands or deals on groceries, while over half (54%) are choosing cheaper brands of clothes or making them by hand. Nearly half (47%) are making their own lunch instead of buying it.
Continuing with the "make do and mend" mentality, over a quarter (28%) are shopping at charity shops or via auction websites, with a fifth (20%) walking or cycling rather than using a car or public transport.
In spite of the 0.5% interest rate, Norwich Union found there is still a fondness for saving. Nearly half (42%) are saving money in a bank account or building society, and almost a third (28%) are putting money into an Isa, although more than a third (36%) admit they are not saving money on a regular basis.
And as a direct result of interest rates, more than one in five (22%) say they have decreased their mortgage payments, with 15% of people saying they are using the money they're saving on their mortgage to help cover living costs. Although more than half say they (56%) are receiving less interest on their savings than before the cuts.
And showing that people are erring on the side of caution in the current climate, one in three (33%) think that paying off debt is more important than saving, whereas one in eight (12%) want to build up savings quickly to protect themselves from the recession.
Anthony Rafferty, head of investments for Norwich Union, says: "It's no surprise that people are feeling the pinch of the recession, yet what is encouraging, is that some people are actually developing sound financial habits as a result. While economic times are tougher, people will look to make their money work harder, so they are more likely to think about where every penny goes.
"Our research shows people are keen to build up savings and pay off their debts wherever possible, both of which are excellent economic practices. It is encouraging to see that people are adopting new ways to deal with the current climate, which could actually help with long-term money management in the future."
The Norwich Union research also revealed the following changes in people's spending over the last 12 months:
- One in five (21%) are spending more on their mortgage / rent
- Over half (56%) are spending more on food
- Three quarters (74%) have seen an increase in spend on utility bills
- Two thirds (66%) have seen a drop in the amount of disposable income they have available.
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Research carried out by Tickbox, March 2009 with a sample of 1,034 people aged 18 and over.
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Sarah Poulter - 01904 452828 / out of hours 07800 691569
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About Norwich Union
Norwich Union is one of the UK's biggest life insurers. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media
In the summer of 2009 Norwich Union will change its name to Aviva. Aviva is the world's fifth largest insurance group and operates in 27 countries. Aviva is to become the customer brand worldwide, thus enabling the company to compete even more effectively on a global scale for the benefit of customers, staff, business partners and shareholders.