More UK consumers feeling the crunch, says Mintel

by Fiona Ramsay, Media Week 23-Jul-08, 00:01

LONDON - UK consumers are increasingly feeling the effects of the credit crunch, according to Mintel research, with fewer people feeling well off than in previous years.

The proportion of those finding their financial commitments almost impossible to handle has doubled, with 4% of British people admitting that they are struggling and have missed financial payments recently.

While the findings are the latest in a line of bad economic news, Mintel's research, which tracks consumer behaviour, will be an unwelcome development for the advertising industry.

Those who see themselves as comfortably off or managing easily has fallen from 64% in 2006 to 51% this year.

There has also been a dramatic leap in those who say that finances are tight, from 25% of those surveyed in 2006, to 39% this year.

Mintel said rising interest rates and higher living costs are hitting consumers, while 46% of adults still have outstanding unsecured debt.

The first four months of 2008 saw a 7% rise in credit card lending, compared to the same period in 2007.

More than 30% of adults have unsecured debt and no savings at all, with over half (53%) of 25 to 34-year-olds in this position.

"The good news is that the vast majority of people can still afford to make ends meet. But there has clearly been a deterioration in people's perception of their financial situation over the past two years, as rising interest rates and higher living costs have really started to take hold," said Toby Clark, senior finance analyst at Mintel.

"As people look to make their hard-earned cash stretch further, any company that can clearly show how it offers good value for money, will be at a real advantage," he added.