Recession hits 2009 harder than 2008
Recession set to hit harder
Wednesday, 01, Apr 2009 08:57
Personal finance woes have already deepened in 2009, as over half of consumers have seen their disposable income decrease significantly this year.
Fifty-five per cent of people have seen their income reduce by at least 20 per cent, compared with just 35 per cent in 2008 - indicating that rising living costs and reduced earnings are hitting consumer's pockets, an Equifax study found.
"As job losses continue to hit the headlines and many companies choose to freeze wages, our survey clearly shows the impact it is having on consumers," Neil Munroe, external affairs director for Equifax said.
Women are most likely to be affected, with 64 per cent reporting having less money to spend, compared to 51 per cent of men.
Mr Munroe said: "Women seem to be suffering the most in the current economic climate. They are the least likely to save which could be because they have seen a significant drop in their disposable income."
But even with less in their pockets, consumers are still spending.
Short term debt - as on credit cards - is more than £5,000 already this year for 40 per cent of respondents, compared to just 33 per cent in 2008.
Here too, women seem to be worse off, with 45 per cent owing over £5,000 on cards in contrast to 38 per cent of men.
Munroe said "This combination of mounting debt and reduced income is a recipe for disaster. We advise consumers to take stock of the amount of debt they take on and think about the long-term implications."
The problem is compounded by the fact that people are saving less this year then in the past.
Equifax study reveals 46 per cent of respondents aren't saving anything from their monthly income in 2009 - a 14 per cent increase year-on-year.