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Analysis Consumer Attitudes Towards Debt UK 2014: Global Region Industry Size, Share, Growth , Research Analysis and Opportunities

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Albany, NY -- (ReleaseWire) -- 07/23/2014 -- A good, fairly priced payment protection product should be a positive proposition for most consumers, especially those vulnerable to difficulty, such as people with poor health, insecure employment or limited finances.

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Table of Content

Introduction

Definitions
Abbreviations
Fieldwork methodology

Executive Summary

Trends in lending
Strong growth in consumer credit throughout 2013

Figure 1: Gross and net unsecured lending to individuals, excluding student loans, January 2005 – April 2014
Housing market exploded into life last year

Figure 2: Gross and net secured lending advances, 2009-13 (not seasonally adjusted)
Credit ownership
Seven in ten have at least one form of debt

Figure 3: Credit product ownership, May 2014
Nearly a fifth owe more than £5,000 of unsecured debt

Figure 4: Level of outstanding unsecured debt, May 2014
Level of comfort with debt and appetite for credit
Most people are comfortable with their current debts

Figure 5: Level of comfort with amount of debt, May 2014
Three quarters are comfortable with their repayments

Figure 6: Level of comfort with debt repayments, May 2014
Less than a fifth plan to borrow next year

Figure 7: Borrowing plans for the next 12 months, May 2014
Attitudes towards credit and debt
Consumers are still wary of debt

Figure 8: Preference to save or pay off debt, May 2014

Figure 9: Preference for shorter or longer repayment schedules, May 2014
Consumers believe lenders should give more assistance to struggling borrowers

Figure 10: Attitudes towards debt management, May 2014
What we think

Issues and Insights

Informal borrowers highlight exclusion from traditional lending
The facts
The implications
Consumers can be judgmental about other people’s approach to debt
The facts
The implications
Rising interest, rising worries?
The facts
The implications

Trend Application

Be proactive to help borrowers help themselves
Credit can fund life events, not just delay them
Accessibility is key to getting advice to young people

Economic Outlook

Key points
Sustained growth finally takes hold

Figure 11: Quarterly change in GDP, 2009 Q1 – 2014 Q1
Wages still squeezed despite falling inflation

Figure 12: Annual % change in average weekly earnings, CPI and RPI, March 2009 – May 2014
Consumer appetite to save increases but remains low

Figure 13: Savings ratio, 2008 Q1 – 2013 Q4
Encouraging drop in unemployment rate

Figure 14: Total UK unemployment rate, January 2008 – April 2014
Low interest rates have increased appeal of personal loans

Figure 15: UK interest rates, January 2009 – March 2014
Rate rises on the horizon

Consumer Financial Wellbeing

Key points
Most people are getting by, but there’s no improvement at the bottom

Figure 16: Trend in consumer financial situation, June 2009-June 2014
One in four people’s finances improved in the last year

Figure 17: Trend in consumer finances compared to a year ago, June 2009-June 2014
Most expect to be OK over the next year

Figure 18: Trend in consumer sentiment for the coming year, June 2009 – June 2014

Consumer Credit Lending

Key points
Gross lending on the rise

Figure 19: Gross and net unsecured lending to individuals, excluding student loans, January 2005 – April 2014
Big growth in net credit card lending

Figure 20: Gross and net credit card lending, 2009-13 (not seasonally adjusted)
Other consumer credit explodes back into life

Figure 21: Gross and net other consumer credit lending (excluding student loans), 2009-13 (not seasonally adjusted)

Mortgage Market Lending

Key points
Big growth in gross mortgage lending

Figure 22: Gross and net secured lending advances, 2009-13 (not seasonally adjusted)
House prices are up, but so are approvals

Figure 23: Monthly mortgage approvals for home-buying, January 2009 – April 2014
Housing equity withdrawal is still unfashionable

Figure 24: Housing equity withdrawal, December 2005 – December 2013
MMR could put a brake on growth

Write-offs, Repossessions and Arrears

Key points
Mortgage arrears and repossessions steadily fall

Figure 25: Number of mortgages in arrears of 2.5% or more and repossessions, Q1 2009 – Q1 2014
Increase in mortgage write-offs bucks the trend

Figure 26: Value of write-offs to loans to individuals, 2009-13
Decrease in insolvencies continues

Figure 27: The number of individual insolvencies in England and Wales, by type, Q1 2008 – Q1 2013

Credit Product Ownership

Key points
Credit cards are the most commonly-held credit products

Figure 28: Credit product ownership, May 2014
Debt ownership reduces with age

Figure 29: Credit product ownership, by age, May 2014

Figure 30: Mortgage ownership, by age, May 2014
A quarter have four or more outstanding debts

Figure 31: Number of different types of credit on which money is owed, May 2014

Figure 32: Credit product ownership, by number of types of credit held, May 2014

Level of Outstanding Unsecured Credit

Key points
Debt levels are largely unchanged

Figure 33: Level of outstanding debt, 2012-14
Most owe less than £3,000
Mortgages are more common among those with larger debts

Figure 34: Ownership of selected credit products, under £1,000 owed vs over £1,000 owed, May 2014

Level of Comfort with Personal Debt

Key points
Most people are comfortable with what they owe…

Figure 35: Level of comfort with amount of debt, May 2014
… and things have improved since last year

Figure 36: Level of comfort with amount of debt, 2013-14
Nearly half with informal debts are uncomfortable with their debt

Figure 37: Level of comfort with personal debt, by debt product ownership, May 2014
Securities stave off discomfort
Student loan-holders are less comfortable than the average
Discomfort with debt peaks at 35-44…

Figure 38: People who are uncomfortable with the amount that they owe, by age group, May 2014
… and increases with the more debt that is held

Figure 39: Level of comfort with personal debt, by level of outstanding unsecured debt, May 2014

Level of Comfort with Debt Repayments

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