Consumer confidence in the economic prospects for 2010 falling according to latest ABI research

Consumer confidence in the economic prospects for 2010 falling according to latest ABI research

Consumer confidence in the economic prospects for 2010 falling according to latest ABI research

Consumer confidence in the economy took a knock in the last quarter of 2009, with one-in-three consumers expecting the economy to worsen in 2010 according to research published today by the ABI. Optimism over the economic prospects for 2010 fell significantly, as worries over job security increased.

The ABI’s Savings and Protection survey for the fourth quarter of 2009 questioned 2,500 adults on their views on the economy, and how it affected their attitudes to saving and protection. Key findings show that:

. Optimism over the outlook for 2010 has fallen. Nearly a third (31%) expect the economy to worsen in 2010, up from 22% in the third quarter. Only 39% were optimistic about the economy in 2010, down from 52% who felt the same in the previous quarter.
. Worries over job security have increased. 31% said that they were more concerned about their job security than they were three months ago, up from 27% in the previous quarter.
. Paying off debts is taking precedence over saving. 42% have started paying off their non-mortgage debt faster than before, up from 34% a year ago. Of those saving regularly, only 17% expect to be saving more in 2010, down from 24% who felt the same way in the previous quarter.
. Despite a reluctance to put money away, more people regard themselves as savers than spenders. 37% see themselves as savers; 31% as spenders. Less than 20% say that they would rather get into debt than go without.

Dr Rebecca Driver, the ABI’s Director of Research and Chief Economist, said:

“Despite continued fiscal and monetary policy intervention, consumer perceptions of the economic prospects and their own job security in 2010 have deteriorated.

“Seven-in-ten people feel that they would cope badly financially if they lost their job, with four-in-ten admitting that they had not made adequate financial provisions to enable them to cope with a large, unexpected expense. This is not because people are spendthrift – the majority would prefer to go without than get into debt, and there has been an increase in the number of people expecting to pay off their non-mortgage debt at a faster rate than compared to a year ago.

“These findings highlight how important it is for any government to deliver policies that appeal to consumers’ increasing sense of financial responsibility, helping more people become financially independent by increasing saving as well as reducing debt.”

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Notes for Editors

1. Enquiries to:
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. A copy of the ABI Savings and Protection survey for quarter 4 2009 is available on: www.abi.org.uk. The survey was carried out by YouGov Financial Services between 1 and 3 December 2009.

3. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.

4. An ISDN line is available for broadcasts.

5. More news and information from the ABI is available on our web site, www.abi.org.uk.