Too Many Brits Sucked into Recession Propaganda

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Fool.co.uk has revealed that one in six Brits believe we’re already in a recession.

The report has highlighted how people are uncertain about the financial status of the nation and when it will become stable again  – one fifth of people asked find the slightest suggestion of a recession ‘fills them with fear’.

One in 20 of those asked fear a recession will continue indefinitely, with a third predicting it’ll last at least two years.

Fool.co.uk studied the differences in opinion and behaviours of two groups – those who have not worked through a recession and those who have lived through recessions in previous decades.

This survey found 41% of recession veterans have already seen a negative impact on their finances, compared with just 25% of recession virgins.

Almost one in ten of these veterans have experienced negative equity in the past, a further 6% have lost a job as a result of recession and 3% have lost their homes.

With this in mind, Fool.co.uk says it is worrying that one third of recession virgins feel stuck in a money trap, with no choice other than to be in debt – and another one third of these say they are clueless about any looming downturns ahead.

While most who were asked said that saving is a good discipline, a third of the virgins and veterans simply can’t afford to do it. But 74% of these will try to change their financial habits this year to safeguard against the effects of an economic slowdown.

David Kuo, head of personal finance at Fool.co.uk, says: “The term Credit Crunch has become a part of our everyday vocabulary over the past eight months, but it’s instructive to see how people feel about a looming recession.”

“In an economic downturn there will be opportunities and threats, and we can take steps to maximise the first and minimise the second. And simple measures such as reining in spending will ensure that we have a pot of spare money tucked away to see us through a slump.”

“With money at your disposal, you can choose whether to pay down your mortgage or put it into a high-interest savings account – the choice is yours. It won’t make the Credit Crunch go away, but it will make life more bearable until it does.”

Jennifer Holloway, head of media at Skipton, says: “There is good news – one in seven of those saving in the UK have more than £10,000 at their disposal. And even though it may seem daunting, it could be easy for those in the red to join those in the black. The first step is to work out exactly how much money is coming in and going out each month and start from there.

“Then, when you’ve spotted where a few sacrifices can be made – perhaps by going out a little less or buying fewer CDs – it’s a good idea to open a regular savings account. Sensible and prudent saving is the best way to beat any difficulties ahead.”

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