Economic pessimism rife among UK’s younger generation

21/05/2009

• Young people believe UK living standards won’t recover for a decade
• Next generation to reform borrowing habits

Young people look set to bear the scars of the current recession for years to come judging by their pessimistic outlook for economic recovery, new research published today by Post Office Financial Services reveals.

However, having been forced to learn financial lessons the hard way, the next generation of adults believe they are far more likely to take on a more responsible approach to credit and spending.

Almost a quarter (24 per cent) of 18 to 24 year-olds believe that living standards will take over a decade to return to pre-recession levels. A further third (34 per cent) predict that economic recovery is more than five years away.

These results reveal a younger generation more pessimistic about the timescale for economic recovery than any other age group. By contrast, just five per cent of 45-54 year-olds thought that recession would last longer than a decade; perhaps indicative of those who have lived through the last recession feeling more optimistic about recovery from the current downturn.

Credit-crunched young people have also learned some serious financial lessons as a result of the recession, and to a much greater extent than in older age groups. This is particularly apparent when it comes to borrowing:
• Half of young people (48 per cent) believe they will reduce their usage of credit as a result of the crunch
• This trend is less apparent among older age groups, with a significantly lower 28 per cent of 35-44 year-olds planning to reform their use of credit

Doug Strachan, head of consumer insight at Post Office Financial Services said: "These findings demonstrate that the recession is already causing a marked change in the attitudes and the potential behaviour of the younger generation in particular.

"Younger age groups have only ever known relative economic good times during their adult lives, so the change in economic climate is therefore likely to hit these groups the hardest, contributing to this overwhelming sense of pessimism. One positive result of this appears to be indications of a desire to change financial habits drastically in the long term."

The credit crunch has also impacted young adults (18-24s) in the following ways:
• More than twice as likely to have borrowed money from a friend (12 per cent) than older age groups;
• 11 per cent cite the decision to put off getting married or starting a family as a direct result of the current economic climate, more than twice the level of any other age group;
• Their greatest fear is the risk of losing their job, this is in line with older age groups; for a third (32 per cent) losing their job is something they are extremely concerned about. Overall, 70 per cent of under-24s are concerned about becoming unemployed.

Ends

Notes to Editors:

For further information or additional data from the Post Office Financial Services People’s Panel, please contact:

Blue Rubicon
Helen Searle/ Kate Cozens
helen.searle@bluerubicon.com
kate.cozens@bluerubicon.com

Post Office Press Office
Hayley Fowell
hayley.fowell@royalmail.com

About the Post Office Financial Services People’s Panel:

Research conducted by T-Poll on behalf of the Post Office People’s Panel during late March 2009. A nationally representative sample of the UK was used. In total, 1,541 consumers were surveyed online.

Research conducted by T-Poll on behalf of the Post Office People’s Panel during September 2008. A nationally representative sample of the UK was used. In total, 1,984 consumers were surveyed online.

The Post Office Panel is a specially recruited group of consumers, nearly all of whom are Post Office customers. They provide regular and in-depth consumer insight into spending patterns and trends within the UK to the Post Office. The Post Office Panel is comprised, in part, of some of the 24 million customers who use the Post Office each week and reflects every social demographic within the UK, as Post Office customers do.




www.postoffice.co.uk