Number of cash-strapped Brits at all-time high

By UK CreditCards.com

Nearly a third of British consumers feel they have no spare cash, according to new research from global information company Nielsen and the British Retail Consortium (BRC).

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The latest Consumer Confidence Survey revealed that while the number of people who feel optimistic about their finances and job prospects has increased slightly in recent months, the majority of people remain gloomy about household budgets.

32% of consumers have no spare cash
Three-fifths of Britons are pessimistic about the state of their personal finances and 32% feel they have no cash left over after their regular outgoings have been met, according to the Nielsen/BRC report. The research, which questioned more than 31,000 consumers in 56 countries between May 20th and June 7th 2011, revealed that many people remain worried about external pressures on their finances, with rising utility bills, the economy and fuel prices emerging as the three most common concerns.

Consumer confidence only slightly improved
The report does contain a glimmer of hope, with the consumer confidence index rising five points to 72 between the first and second quarters of the year. But the proportion of people who feel optimistic about their job prospects for the coming year (19%) still pales in comparison to the proportion who remain pessimistic (73%).

Any Olympics boost 'likely to be short-lived'
Chris Morley, Nielsen's managing director for UK and Ireland, revealed that sentiment is no higher than it was two years ago, when the UK was still in the grip of recession.

"We expect to see confidence boosted by a feel-good factor next year around the Olympic Games, but until then -- with price inflation running well ahead of any wage increases, renewed economic instability across Europe and a new round of utility bill hikes -- it's hard to see any improvement in mood being sustained," predicted Morley in a news release.

BRC director-general Stephen Robertson agreed that people are noticing a squeeze on their disposable income, with the number of consumers without spare cash reaching "a new record high". He also revealed in the news release that households that do have money left over after paying for essentials are choosing to bolster their savings or pay off debts, such as credit cards and overdrafts, rather than make unnecessary purchases.   

See related: Food prices rising, forcing Brits to creatively cope; Concerns raised over unsecured debts of low-income groups

Published: 12 August 2011