Consumer Attitudes to Debt - UK : Market Research Report

Consumer Attitudes to Debt - UK

Published by: Mintel International Group Ltd.

Published: Jun. 1, 2008 - 123 Pages

Issues in the Market: Mintel asks…; Market definitions; Secured lending; Unsecured lending; Abbreviations
Market in Brief: The mortgage market is braced for a sharp fall…; …while the consumer credit market grinds to halt; Even more difficult times ahead; As the mortgage market contracts, competitive pressures ease; So what are mortgage holders planning to do over the coming year?; Mortgage and credit card debts are the most common; A quarter of mortgage holders owe more than £100,000; Unsecured borrowers generally owe less than they did a year ago; People feel worse off now than two years ago…; …but there has been a slight fall in those with debt worries
Household Debt in Context: Key points; The debt mountain; Credit cards used to pay the mortgage; More feeling the pinch; Net lending set to fall sharply in 2008; Debt-to-income ratio continues to move upwards; Other indicators also paint a gloomy picture; Putting debt into context; Factors fuelling over-indebtedness; Borrowings versus savings; Being in debt is an affliction of youth; FTBs are becoming a rare breed
Changing Market Environment: Key points; Economic trials ahead; Reduced spending to slow economic activity; Inflation worries; Stagflation; Consumer confidence at lowest level since the early 1990s; Spending curtailed as people take a more cautious approach to their finances
The Crunch Effect: Key points; The origins of the credit crisis; Liquidity dries up; Bank run on Northern Rock; Sharp reduction in supply of mortgages; Lenders close the doors on first-time buyers; Thousands of credit card applications turned down every day; Bank of England launches scheme to improve liquidity; Banks face big losses…; …and some turn to their shareholders to raise cash; Mortgage and loan providers cut back on advertising
The Mortgage Lending Market: Key points; All change; Gross mortgage advances to fall by a fifth in 2008; Slow recovery forecast; Factors incorporated
The Consumer Credit Market: Key points; The party’s over; Borrowers show greater preference for credit cards; A stagnant market forecast for the short term; Factors incorporated
The Consumer - Ownership of Lending Products: Key points; About Mintel’s consumer survey; A nation of borrowers; 15 million people have a mortgage…; …while 22 million have built up unsecured debts; Gender bias; Credit cards are a popular option for those seeking credit; Debt consolidation remains a niche area; Store cards lose their shine; Slight increase in the proportion with debts over the past year; Those aged 25-44 have the highest penetration of outstanding debts; Financial pressures are high during the family years; ABs are most likely to have a mortgage; Two thirds in overdraft also have credit or store card debts; A quarter of borrowers make use of multiple credit facilities; Mortgagors and mid- to high earners tend to make use of several borrowing facilities
The Consumer - Level of Debt: Key points; One in 20 mortgage holders owe more than £200,000; The under-45s tend to have the highest mortgage balances; Around one in eight borrowers have unsecured debts of over £10,000; Those with large credit balances tend to use multiple borrowing facilities; Pre-/no family individuals most susceptible to running up credit; Two in five mortgage holders have insurance protection
The Consumer - Current Financial Situation: Key points; People are having to be more careful with their money; The under-35s are the most hard-up; Those with multiple debts tend to feel worse off; Those who are ‘always in debt’ or ‘struggling’ are least likely to have a mortgage; Wealthy mortgage holders can more easily cope with a large mortgage; Those struggling have the highest debt levels
The Consumer - Saving, Borrowing and Managing Money: Key points; Merely half of all adults think they’re good at managing money; Nearly 3 million have debt worries; People appear to be less sure of their financial capabilities than in the recent past; Debt worries plague the most hard-up; Those with multiple debts tend to keep a close eye on their bank balance; Reckless youth; Wising up with age; ABs are the most financially responsible; Demographic analysis summary; Segmenting the population according to their approach to money; Credit-reliant; Money Monitors; Savvy Savers; Cool & Aloof; Accountants; Credit-averse; More than a quarter of Credit-reliant individuals are in overdraft; Savvy Savers are in the strongest financial position; A fifth of Credit-reliant individuals have run up unsecured debts of over £10,000; Accountants have the highest mortgage balances, on average
The Consumer - Attitudes and Expectations: Key points; A third of people expect house prices to fall over the next year; A quarter plan to curtail their spending; Owning property makes people feel more secure; Concerns about the economy are shared by young and old alike; The less we earn, the more insecure we feel; One in ten who are ‘struggling’ plan to borrow (more); Those with multiple debts are keen to curb their spending; Credit-reliant depend more on friends and family for financial back-up; Further analysis
Appendix 1: Demographic Analysis of Debt Ownership
Appendix 2: Profile of Money Management Clusters

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Consumer Attitudes to Debt - UK

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