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Associate Article

The growth in internet spending and usage

Consumer spending is expected to hit a three year low next year as falling house prices and worries about the state of financial markets knock confidence. Despite this, one area where you can still expect quite massive growth is the internet. Online sales are currently growing at an average year on year rate of 45 per cent, while the amount spent online now accounts for 10 per cent of the annual spending total of £300 billion. It is thought that consumers will spend up to £200 million a day in December up to the 20th of the month, which is the day when postal orders will no longer reach homes in time.

Particularly big growth areas this Christmas are groceries and clothing, but other areas that are attracting a new generation of entirely web based spenders include online gambling, and online auctions such as Ebay.

67 per cent of the population regularly use the internet in 2007, up from 59 per cent in 2003, but a recent study by the Oxford Internet Survey has seen massive differences in internet usage between age groups. Internet usage falls off greatly among people who have retired, with only 31 per cent of people over 55 using the internet compared with 97 per cent of students, a pattern that has persisted since the survey started in 2003. Additionally 39 per cent of those with incomes under £12,500 regularly use the internet, making it clear that usage has a relationship with affluence.

Social networking has been a particularly important factor in many younger people regularly using the internet. The OIS found 42 per cent students have created a profile on Facebook or Myspace, but just 15 per cent of the employed and 2 per cent of retired people.

A commercial paradox of the internet is that the people who use it most often do not necessarily have the cash to spend online. The older generation meanwhile, who have (on average) more to spend than young people, are much more cautious about spending online, or even using it. A survey by the Post Office has shown grave concerns amongst people over 50 about using the internet – as many as 41 per cent were worried about fraud. There have been recent concerns over people having their identity stolen through social networking sites, while almost all transactions will require you to put your bank card details on an online form. The reality is, however, that shopping on the internet is just as safe as shopping on the high street, while social networking sites have privacy settings to protect you against identity theft.

If you think you’re ready to shop on the internet, you’ll need a credit or debit card. Natwest offer a number of credit cards with a typical rate of 13.9 per cent along with a number of other benefits. It is also possible to apply for loans and mortgages via their website.





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