People spending more than they earn
31 March 2004
People are spending more than they earn according to Mintel's annual report on British lifestyles.
Over the last decade consumer income has increased by a massive 65 per cent to exceed £900 billion, but consumer spending has moved faster increasing 73 per cent over the same period.
As a result people are saving less, with only 5.5 per cent of our disposable income finding its way into savings, compared with 10 per cent in 1993.
Peter Ayton, chief statistician at Mintel, explains: "This clearly shows that spending rather than saving has been a priority for people recently. But there are now indications that people are starting to tighten their purse strings. A savings ratio of 5.5 per cent is in fact slightly higher than that of 2002."
Since 1993, net consumer debt has risen by 624 per cent from £2.63 billion in 1993 to a colossal £19.07 billion last year.
Almost half, 45 per cent, of Britain's £400 billion income goes on housing and finance, a sum which is up on the 1993 figure of 39 per cent.
We now invest far more in property, pensions, and insuring our increasing horde of material possessions the report adds.
The convenience of internet banking has seen an explosion of popularity with more than 17 million people using internet services. Five years ago this figure was just 0.4 million.
Mintel's findings also examined house prices. Total expenditure on housing more than doubled between 1993 and 2003, from £106 billion to £232 billion.
Peter Ayton, commenting on the housing boom said: "The media has been full of speculation about an imminent crash of the market. But even though the market may now be past its peak, Mintel sees no reason to believe that there is going to be a crash in the housing market, as seen in the early 1990s.
"In fact, the market is set to continue to rise. But the growth will be at a more measured pace than has been seen over the past five years as the rest of the country catches up with the South East," he added.