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People Still Cautious About Their Finances Despite Wage Increases And Low Inflation

09 March 2016

 

New research to support the launch of Sainsbury’s Bank’s first ever ‘Family Finance Report’ reveals that, despite the emergence of green economic shoots, the majority of people in the UK are not feeling any better or worse about their finances this year than in 2015(1).

The new report looks at some of the biggest financial challenges facing families, and uses a newly assembled panel of experienced personal finance experts to offer tips and guidance on how to overcome those challenges.

Despite people’s wages increasing by around 2%(2) in the past 12 months and consumer price inflation averaging 0.02% last year, the report reveals that 47% claim they feel no better about their finances this year than they did in 2015. Some 26% feel less confident about them, compared to 24% who feel more up-beat.

Only 19% of women believe they will be better off this year than in 2015, with 28% believing they will be worse off.  The corresponding figures for men are 29% and 25%.

In total, 73% of us admit to having some financial concerns and for 26% of people, their biggest money worry is the cost of living, and this is followed by 13% who cited changes to their family’s income. Nearly one in ten (9%) said their main financial concern was not receiving a good enough return on their savings.

What are you most concerned about when thinking of your finances in 2016?  Percentage of UK adults who said this
Cost of living 26%
Changes to my family’s income 13%
Not getting a good return on my savings 9%
Interest rate rises 5%
Cost of housing 5%
My children’s financial future more than my own 5%
Cybercrime/identity fraud 4%
Other/don’t know 11%
I am not concerned 22%

 

Simon Ranson, head of banking at Sainsbury’s Bank said: “Our research shows that people’s hourly earnings have gone up 3.9%(3) over five years. And with inflation now going down, we should be starting to feel better off. But many people are still concerned about their family finances however and are shopping around to secure the best available deals.

“The good news is that our findings reveal that many people are looking to save money by refinancing their borrowings, and also find a new home for some of their savings and investments to receive a better return.”

On a regional basis, 40% of Londoners feel more confident about their finances this year compared to 2015, followed by 32% of adults in Yorkshire and Humberside. Only 14% of people in Wales feel more confident – the lowest of any part of the UK – followed by 17% in Scotland.

The group which has grown most in confidence is the are 18 – 34 year olds (40%) while those aged 55 and over are most likely to feel less confident than 12 months ago (59%).

Despite the publicity given to the prospect of interest rates rising, just 5% of people said that this was their main concern, and the same percentage said this about the cost of housing in the UK. Similarly, one in twenty people (5%) said that their biggest financial worry was their children’s financial future.

The bank’s findings reveal that in total, 20% of people are looking to move one or more borrowings to a better deal, and 65% are planning to switch savings for a higher interest rate.

Similarly, to help save money, 65% are planning to shop around to try and find a better quote for one or more insurance products, and 39% of people are going to do this for their gas and electricity supplies.  Some 37% are planning to do this with their phones and broadband.

Furthermore, 12.6 million people – one in four of us – plan to make more use of reward points and discount vouchers this year to help make their money go further.

The findings from the research can be found at www.sainsburysbank.co.uk/familyfinance  along with advice from personal finance industry experts.

Advice from financial experts includes:

Sarah Pennells, Savvywoman.co.uk says:

“This research shows, that for many people, the feel-good factor hasn’t yet made it to their wallets. The fact that almost three quarters of people say that they have financial concerns shows that, over seven years after the credit crisis, many families don’t feel completely confident about their household finances.

“It doesn’t surprise me that women say they feel less confident about their finances than men, as that’s what I’ve consistently found.

“What’s encouraging is that so many people are planning to take action to improve their own financial position; whether that’s by using vouchers and reward points to get more from money they spend, shopping around for insurance or setting aside more money in a savings account.

“The research shows that many people do feel empowered to make changes to their finances – and even quite small steps taken today can make a big difference in the long run.”

Andrew Hagger, Moneycomms.co.uk says:

“Getting money off vouchers, cashback or reward points in return for your loyalty to a credit card provider are all handy ways to give your household budget a bit of a boost.

“However to ensure you’re getting the best from these loyalty offers, ensure you always pay your credit card statement balance in full every month otherwise the interest charges incurred will soon wipe out the value of the cashback or reward points that you’ve earned.”

Ian Hughes, Consumer Intelligence says:

“Shopping around for car insurance has almost become a national sport, with consumers knowing that they need to check their premiums every year to make sure they get the best price.  Incentives like Nectar points and free cinema tickets are also available for savvy shoppers.  2016 will be no exception, premiums are already up 10% and the impact of changes in tax on insurance and other measures introduced by the government is likely to be felt in everyone’s pocket.  We anticipate that 2016 will be one of the biggest years for shopping and switching for a long time.”

For information on Sainsbury’s Bank credit cards, loans visit sainsburysbank.co.uk or pick up a leaflet instore at Sainsbury’s.

– ENDS –

Notes to Editors

(1)   Sainsbury’s Bank commissioned Opinium Research to survey 2,006 nationally representative UK adults aged 18+ between 24th to 27th November 2015. Opinium Research is a member of the British Polling Council and abides by its rules

(2)   ONS ASHE Report – 2015 figures (rounded up from 1.89%)

(3)   Sainsbury’s Bank analysis of ONS data – November 2015

(4)  Infographic and data tables summarising the regional breakdown are available on request

For further information, please contact:

Citigate Dewe Rogerson on 020 7638 9571 Natasha Virtue, Jennifer Johnston-Watt, or Lorna Gilmour at Sainsbury’s Bank’s press office on 0131 286 0010

 

This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.

Sainsbury’s Bank:

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