R3 comments on new ONS Household Statistics
Despite a curb in spending, households struggling to make ends meet
Households have become more conservative about their personal finances since the onset of the last recession in 2008. R3, the insolvency trade body’s analysis of the new ONS Quarterly Household Statistics finds that in 37 out of 44 quarters between Q1 1998 and Q4 2008, household expenditure outstripped household income (per head). However, since Q4 2008, expenditure has not exceeded income (per head) once. Published for the first time this week, and as part of the Measuring National Well-being Programme, the ONS is producing a quarterly release on the household sector. The releases will aim to shed light on the impact of economic activity on UK households and therefore the performance of the economy as a whole.
Frances Coulson, R3 President comments:
“The onset of the credit crunch meant that individuals were less able to obtain credit and the result of this was a curb in their spending habits. This could be an indication that households were trying to pay down their debts and budget more effectively. However, four years later we are still finding people concerned about their financial situation. Recent research by R3 shows that 39% of people are worried about their current level of debt, with 50% of those individuals saying credit cards are the source of this worry. Despite the apparent shift away from excessive spend, 37% of individuals still struggle to make it to payday.
“The same R3 research found that 44% of people feel that the rising cost of living means that they are spending less on non-essential items. The ONS statistics reveal that incomes have stagnated over the last year and so spend on non-essentials is likely to be squeezed even further. This may also limit households’ ability to pay down debts and impact on businesses that rely on discretionary consumer spend to survive. We have already seen several retailers unable to withstand the pressure, and this could worsen if households are not able to afford to spend.”
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Notes to editors:
- R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK.
- R3 comments on a wide variety of personal and corporate insolvency issues. Please contact the press office, or see www.r3.org.uk for further information.
- R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies.
- R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.
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