Economic conditions across the country are showing some signs of improvement but consumers remain unconvinced.
Twenty one per cent of people living in Britain believe that their standard of living will worsen over the next 10 years, according to a poll carried out by Ipsos MORI. In a similar poll conducted five years earlier, that figure was just 14 per cent.
It is hardly surprising that consumer confidence is low at a time when the economy has ground to a halt but the statistics appear to indicate that some families believe they will continue to struggle to maintain their standard of living even when the economy does improve.
Those surveyed say that ownership of a home, extra savings and employment indicate a higher standard of living. Worryingly, though, many lack the insurance to cover basic needs like medical illness, damages to property and even job loss. For instance, only 15 per cent of those surveyed have a critical illness plan and 9 per cent have an income protection plan.
“There has been an increased interest in unemployment insurance benefits, as well as in illness coverage,” said Susan Barclay, head of Marketing at Scottish Provident, a provider of life, critical illness, income protection and employment cover. “We found that 60 per cent of people with employment were afraid of losing their jobs, but of those people, only 5 per cent had coverage.”
Another 60 per cent said that savings were an important indicator for a higher standard of living, but only 26 per cent believed that their families had enough to protect them against random economic shocks.
The households surveyed express a gloomy outlook over their own personal financial condition, but lack the resources to protect themselves against another economic downturn.
Ms Barclay said that improvements in the economy - such as the recent rise in UK housing prices - need to be put into perspective, since positive activity in the markets aren’t necessarily linked to current employment conditions.
However, a recent survey released by the market research company Nielson and the British Retail Consortium (BRC), says consumer confidence has risen to an 18-month high. The Consumer Confidence Index rose to 75 from a record-low of 65 in April.
But despite this, the report said consumers are expected to continue changing to more conservative spending habits, even if the economy improves.