New research from Which? has examined how people in Scotland are coping financially and reveals the most financially distressed areas in the country.
In a new report exclusively on Scottish consumers, Which? has found 36% of households – that’s 800,000 across the country – are feeling financially squeezed, with the constituency of Glasgow East the most distressed area.
Just a quarter (24%) say they are living comfortably on their incomes, with energy (80%), fuel (75%) and food (71%) prices the top consumer worries.
Around four in 10 (44%) Scottish consumers say they are concerned about the level of their household debt and more than half (53%) are worried about their level of savings.
Despite the squeeze six in ten (59%) Scottish consumers say they are satisfied with their standard of living with seven in 10 (69%) telling us they will put more or the same amount of money away in savings in the coming year.
However worryingly three in 10 (31%) people who are not retired are not contributing to a pension and have no plans to do so in the next year and nearly two thirds (64%) say they don’t know how much they will need to save to live comfortably in retirement.
Scottish consumers also lack trust in many of country’s key industries like banking and energy. Fewer than one in five (17%) Scottish consumers trust providers of long term financial products, like pensions and insurance, to act in their best interest and a similar percentage (18%) say the same of gas and electricity suppliers. This compares to 50% who trust Scotland’s water provider and 52% who trust companies in the food and groceries industry.
Head of Which? public affairs for Scotland, Gordon MacRae, said:
“Our research provides a unique insight in to how consumers are coping financially and where the squeeze is being felt across Scotland.
“It is good that many people in Scotland are feeling confident about their standard of living but the cost of essentials remains high and there remains levels of worry about household debt and savings. It is also clear that businesses, particularly in banking and energy, have more to do to win back consumers’ trust.”
The 10 most financially distressed constituencies are:
- Glasgow East
- Glasgow South West
- Glasgow North East
- Glasgow North West
- West Dunbartonshire
- Caithness, Sutherland and Easter Ross
- Na h-Eileanan an Iar
- Airdrie and Shotts
- Banff and Buchan
Notes to editors:
- Which? is the largest consumer body in the UK. We achieve change by providing information and impartial advice that puts people in control, by providing services and products that put consumers’ needs first to bring them better value and through running campaigns that make people’s lives fairer, simpler and safer. We operate as a group social enterprise whose growing work on behalf of all consumers is funded solely by our commercial ventures. We are completely independent and receive no government money, donations from the public, or any other fundraising income.
- Survey methodology: Our report analyses Scottish consumer sentiment over time drawing on data from the Which? Consumer Insight Tracker from 2012 until now, a monthly survey of 2000 UK adults. Data quoted is based on the most recent quarter of data: Populus, on behalf of Which?, surveyed a representative sample of 527 Scottish adults online between December 2013 and February 2014. Data were weighted to be demographically representative of all Scottish adults. Populus is a member of the British Polling Council and abides by its rules.
- Financial distress methodology: The financial distress index estimates the extent to which the households in an area are experiencing financial difficulty relative to all other areas. The index is a summary indicator of 5 levels of the Which? squeezometer, with greater weight attributed to the more severe levels of distress (such as defaulting on payments). The 5 levels are – Level 1 Cutting Back only; Level 2 Using savings to cover spending and cutting back; Level 3 Borrowing from friends/family using credit or authorised overdrafts and cutting back; Level 4 Using unauthorised overdrafts or payday loans; Level 5 Defaulting on loan, bills or housing costs. Respondents are classified according to the most severe difficulty they said they had experienced. The total percentage experiencing distress at the moment is 36% of Scottish households. Based on the ONS population estimates from 2012 that there are 2,386,207 households in Scotland, this is equivalent to approximately 800,000 Scottish households.
- Data for constituencies have been estimated by combining the Which? Consumer Insight Tracker Poll (Dec 2013 to Feb 2014) with ONS’ Output Area Classification (2001) and Census 2011. We have used Scottish Westminster constituencies – based on MPs constituencies.
- Other key findings include:
- Between December 2013 and February 2014, on average three in 10 (29%) Scottish consumers said they had cut back spending on essential household items.
- But they are less likely to say they are planning to reduce expenditure on groceries and food (43% in February 2013, compared to 37% in February 2014).
- Women are significantly more likely to say they are worried about their level of household savings than men (59% compared to 48%).