Consumption culture and personal debt

A ‘have it now’ culture of ‘spend now, save later’ is well embedded amongst British consumers. It is more socially acceptable to have high levels of personal debt than for previous generations as debt has became more easily accessible. Britain has the double the levels of debt than continental Europe and personal savings levels are at their lowest levels since the 1940's. The recession and the credit crunch are making it harder for individuals to service existing debt as loan rates are still prohibitively high despite cuts to interest rates. The burst of the housing bubble has also left many people struggling to pay unaffordable mortgages. However, low inflation means that the price of consumer goods are currently more affordable.

What are the implications?

  • Decreased consumer spending and confidence which may deepen the recession and increase the risk of deflation.
  • Interest rates remain low in an attempt to stimulate consumer spending and kickstart the economy.
  • Further pressure on lenders to lower interest rates on loans.
  • Growing poverty and inequality as those with lower incomes are more likely to get into debt.
  • A continued rise in repossessions as growing numbers of people are unable to pay their mortgages (see housing market).
  • This may lead to a rise in numbers of homeless people.
  • Empowered consumers who consume now and spend later.
  • Increased levels of debt may impact of levels of individual giving.
  • Increased demand for VCOs that provide debt advice.
  • Significant implications for charities that work with people in poverty.
  • Significant implications for charities that work with homeless people.

Moving forward

An increase in debt may impact on levels of individual giving.

  • What strategies can your organisation put in place now to manage potential future changes in funding?
  • Can you diversify your income sources or work in partnership with other organisations?

Organisations that work with homeless people, those in poverty or debt may find there is greater demand for their services. If you amongst this group of organisations, how can you respond?

Want to know more?

Consumer spending and Debt

Published by: IPPR

Date: Pending

Format: Web and PDF

What is it? A work in progress - this project will look at the implications of consumer culture for lower income households in the context of the recession, with the aim of influencing policy.  The project outline is available to download.

How useful is this?  One to watch.

Consumerism in the UK

Published by: ESRC – a research council for social and economic issues.

Date: 2007

Format: Web

What is it? A statistical overview of consumerism in the UK.

How useful is this? A good introduction to UK consumerism including spending patterns, debt and consumer power.  It provides useful statistics, for instance on consumer spending and consumer complaints.

Monthly debt statistics

Published by: Creditaction

Date: Monthly

Format: Web and PDF (the latest release can be found under the 'statistics' heading on the home page

What is it? A collection of a range of statistics on UK personal debt.

How useful is this? A useful free source of information which is updated monthly. It includes a number of 'striking numbers' which help to bring the statistics to life.

Last updated at 14:34 Wed 23/Sep/09.

Recent comments

Megan 's picture


Third Sector Foresight

According to a recent populus poll for the times, 94% of the public are confident that they will be able to keep up with their rent or their mortgage in 2008, while four out of five say they will be able to reduce their non-mortgage debt in 2008. Populus report that this confidence chimes with recently released repossession data which showed that there were actually 10% fewer repossessions than predicted in 2007.

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