June 15, 2012 06:00 ET

New Report Reveals Impact of Financial Crisis on Household Spending and Saving

LONDON, UNITED KINGDOM--(Marketwire - June 15, 2012) -

• Only 1 in 3 feel optimistic about their financial future

• 1 in 3 say they are unable to save any money

• Families spend an average of £666 a month on bills

• Report attached

Comment from

• Neil Prothero, lead UK analyst of the Economist Intelligence Unit

• Reza Attar-Zadeh, Banking Director at Santander

A new report produced for Santander released today reveals the true impact of the financial crisis on British households.

Across the nation perceptions of personal finance are shown to be especially bleak, with just a third (31%) of respondents admitting that they feel optimistic about their financial prospects. And the rising cost of living is stifling recovery, with the average household revealed to now spend £666 every month on household bills, forcing many to change spending habits in order to cover the costs of the basics.

With an average monthly bill spend of £666, British families could reduce costs by nearly £100 with Santander's 123 Current Account and Credit Card.

The study also revealed that the economic situation has been particularly bad in areas such as Nottingham or Birmingham, where with the additional weight of having one of the youngest populations in the UK and record levels of youth unemployment, just 11% of people feel they have been unaffected by the financial crisis.

According to the report, areas closely aligned to the public sector, such as Wales, Northern Ireland and the North East will continue to suffer, with the worst yet to come for some.

However, the report does reveal that some parts of the country are less affected. In Manchester, a recipient of major new investment, 35% of those surveyed stated they don't worry about money any more than they used to, compared to a national average of 28%.

Likewise in Leeds where business confidence is high just 53% feel affected by the financial crisis and just 44% are worried about money - considerably lower than the national averages.

And in savings, although almost a third (31%) of people say they are unable to put away any money each month, two thirds are able to save - and a third (31%) of these are putting away more than £99 on a monthly basis.

Neil Prothero, lead UK analyst of the Economist Intelligence Unit said: "Large swathes of the population are currently experiencing stagnant wage growth and rising costs and the bad news for consumers is that the costs for basic necessities such as food and energy are going to continue to rise as they're influenced by global price pressures. We are, unfortunately, experiencing a long period of reduced growth, and unemployment will continue to rise over the next year or so.

"But many areas of the country are starting to emerge from the downturn, reinforced by the British Chambers of Commerce recently saying business confidence is returning and the economy is starting to show signs of growth."

Reza Attar-Zadeh, Banking Director at Santander, said: "Times have been undeniably tough over the last couple of years and the economic downturn is taking a toll on households. Despite this, there are some encouraging signs, such as the two thirds of people who are regular savers.

"We believe banks have a role to play in helping people during times like these by offering products and services that help them manage their money, even down to helping reduce the impact of household bills. As an example, this is what we do with the Santander 123 current account, which helps cut the cost of many commonplace household bills. Santander's 123 current account can cut the cost of water bills and council tax by 1 per cent, electricity and gas by 2 per cent, and mobile, home phone, broadband and paid-for TV packages by 3 per cent."

Santander's 123 Current Account

• Innovative new current account launched in March 2012 pays cashback on household bills and interest on balances, so customers save when they spend and save when they don't

• The only account in the UK to offer up to 3% AER on the entire current account balance up to a maximum of £20,000

• Every single person who has household bills to pay could make savings from this 'all in one' current account

• It will give longer term value for customers, year after year - with no introductory incentives or gimmicks

• The 123 Current Account, together with the popular 123 Cashback Credit Card, makes a value-adding combination that defines Santander's '123 World'

Product benefits

New 123 Current Account pays cashback on household direct debits

• 1% cashback on water and council tax

• 2% cashback on electricity and gas

• 3% on mobile, home phone, broadband, and paid-for TV packages

New 123 Current Account also pays in-credit interest

• 1% AER on the entire balance, once the customer's balance is £1,000 or over

• 2% AER on the entire balance, once the customer's balance is £2,000 or over

• 3% AER on the entire balance, once the customer's balance is £3,000 or over (up to £20,000).

Notes to editors

- Full report attached

- The research was conducted by Fresh Minds on 2000 respondents between 23-28 February 2012

- Interviews with Neil Prothero available on request

- Page 9 of the report indicates average monthly bill spend of £666. Using Santander's 123 cashback calculator customers paying their household bills (not food) by direct debit from the 123 Current Account could earn £66 a year cashback. Customers buying their monthly food shop using Santander's 123 Credit Card would earn 1% cashback on £256.59 = £30.79 a year + £66 = £96.79 a year in cashback.

Santander UK plc is a full-service retail and commercial bank providing services to 25 million customers, with more than 1,300 branches and 28 regional business centres. It is a wholly owned subsidiary of Banco Santander. Santander UK plc manages its affairs autonomously, with its own local management team, responsible solely for its performance. Over 90% of the assets on Santander UK plc's balance sheet are UK based and it is subject to full supervision of the Financial Services Authority (FSA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK. Sovereign exposures to Europe (excluding UK) as at March 2012 are not significant at less than 1% of total assets and primarily relate to Swiss government. Total exposure to periphery countries is c. 0.3% of total assets.

Banco Santander (SAN.MC, STD.N, BNC.LN) is a retail and commercial bank, based in Spain, with a presence in 10 main markets. Santander is the largest bank in the euro zone and is among the top fifteen in the world by market capitalization. Founded in 1857, Santander had EUR 1.383 trillion in managed funds, more than 102 million customers, 14,760 branches - more than any other international bank - and 193,000 employees at the close of 2011. It is the largest financial group in Spain and Latin America. Furthermore, it has significant positions in the United Kingdom, Portugal, Germany, Poland and the U.S. northeast. Santander Consumer Finance operates in the Group's core markets as well as in the Nordic region. In 2011, Grupo Santander registered EUR 7,021 million in recurring net profit.

Contact Information

  • Santander UK plc
    Jonathan Akerman
    Senior Media Relations Manager, Communications
    +44 (0) 20 7756 4190 or M: +44 (0)7850 640770
    Twitter: @JAkermanSanUK