The news headlines have announced that while it certainly feels like we’re in the throes of a recession already, we won’t technically know for sure until early 2023 when the growth statistics for the last quarter of 2022 are available.
That’s the situation in the United Kingdom, but the story is similar in many countries across the globe. Europe is still hosting a war that no sane person wants to happen while rich Qataris host a corrupt Fifa world cup at the same time, the mind boggles.
We’ve been told that the worst of the cost of living crisis is over us, and government backed controls are being implemented to help protect the most vulnerable but how has the average consumer fared during all of this? What does looming (or if you like – continuing?) recession mean for the average Joe, or is life still pretty much going to stay the same. Tough times will continue to feel tough. To help you orientate your way into 2023 we’ve provided a snapshot of what life as a credit consumer is like as the end of the year approaches.
Research reports on how the average credit consumer in the UK is coping with debt suggests a worrying picture of life as a modern consumer of credit products. Research conducted by The Money Advice Service suggests that over 50% of a survey of over 5000 people admitted they were struggling financially, compared to just 35% who made the same admission in the same survey carried out by a government backed body over ten years ago.
The picture of life as a credit consumer in Northern Ireland was shown to be particularly dire in the Money Advice Services’ survey, with more than 65% of those surveyed admitting they were struggling financially. Looking outside of the United Kingdom, South Africa is one of the countries well documented in both their financial debt and their financial literacy struggle. Data published by credit lender Wonga estimates that around 50% of the country is considered financially literate with approximately 5% of people in a position where they will be able to retire comfortably in the future.
The UK based survey also suggested that poor financial literacy is not only a problem in developing nations like South Africa. It’s rife across the nation with thousands generally struggling to plan and understand how to budget. Over 15% of those surveyed stated they did not understand how to read a bank balance from a bank statement.
The survey highlighted that more and more people are failing to plan for contingencies and for their financial future. This is perhaps the most worrying result of all, as it is the firmest evidence that there are worse times ahead for the people who are currently struggling financially amidst a cost of living crisis. Moreover it suggests that people might have to ignore emergencies due to cash shortages which can make a financial emergency worse.
The survey conducted by The Money Advice Service gives a real and worrying picture of how these policies have impacted the average debt ridden credit consumer. What emerges is a warning for the present but also our long term future, what with no relent in the rising costs of living that people across the globe are facing.
What are your views on what life is like as a consumer in today’s society? Do you think the government should do more to mitigate the rise in the cost of living, or do you think that people just need to take more responsibility for their own personal finances? Let us know in the comments below.
