With the latest UK GDP figures set to show that the UK economy is now officially in a recession, new consumer research from Mintel shows that over 5 million adults have already been 'Hard Hit' by the economic downturn and are seriously struggling to make ends meet.
This equates to no less than one in every ten British adults (11%). And according to the research, things are only set to get worse, with a further 16% 'Fearing for the future' because they are worried about their long term financial security.
"So far, most people are coping fairly well with the downturn. But for an unfortunate few the slowing economy is already causing them real financial problems. And even more are genuinely worried about their future security," comments Toby Clark, Head of Financial Research at Mintel.
On top of this, more than half the population (52%) are now 'Feeling the Pinch'. This group may well be coping financially, but they admit that life is certainly getting harder. But it cannot be ignored that 21% are 'Comfortable and Confident' and do not feel that their finances have really been badly affected by the worsening economy.
"For most, the economic downturn has been fairly manageable. Some will even be feeling better off, with more money to spend as inflation falls and interest rates reach a new low. However, there is little doubt that as unemployment rises, confidence across the board will take a hit," comments Toby Clark.
When it comes to what people are cutting back on, eating out and socialising are right up at the top of the list. Indeed, in the past six months over half (51%) of all adults say that they have dined out less, while 45% claim to have reined in how much they spend on socialising in general.
But the really serious figures start to show when we look at the two groups that have been worst hit by the economic downturn – 'Hard Hit' (11%) and 'Fearing for the Future' (16%). Indeed, almost seven in 10 (68%) adults in these groups say that they have had to cut back on dining out, while 64% are socialising less.
"People are not necessarily giving up socialising altogether. Strong performances by value-led chains such as JD Wetherspoon and Domino's Pizza shows that people are still going out and enjoying the odd treat, but that they are finding ways of keeping the costs down," explains Toby Clark.
But for the harder hit consumers, the cut backs do not stop here. Indeed, for many the situation has become so severe that they are also having to reassess their commitment to making important financial payments. Around a third (32%) have reduced their regular savings contributions and 12% have lowered their loan repayments.
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