The report has found that Brits are working harder than ever before, yet almost one in three have nothing left in their bank account at the end of the month. The study into the nation’s spending habits paints a picture of a ‘work hard, play hard’ nation, with consumers using debt to fund their luxury lifestyle. Between 1997 and 2007, spend on non-essential items have soared at 2.5 times the rate of inflation, growing by 65% against a modest 48% rise in net income. Over the same period, debt repayments have rocketed by 104% as almost six million consumers resort to borrowing every month to meet their outgoings.
According to the report it is not just the younger generation who are frivolous with their spending. 15% of 45-54 year olds spend more than they earn, compared to just 9% of 25-34-year olds. With people spending more, consumers are increasingly relying on debt to fund their extravagant lifestyles. The rise in debt repayments since 1997 is more than double the rise in income and individual monthly debt repayments have doubled from an average of GBP174 per person in 1997 to GBP356 in 2007.
Ann Robinson, director of consumer policy at uSwitch.com, said: Britain is suffering from a bad case of affluenza. We are caught in the grip of a spiral of conspicuous consumption where it’s no longer enough to keep up with the Joneses, but instead we want to live like our favorite celebrities. The shock reports from the high street are the first signal that this trend is changing and, with the credit crunch beginning to bite, consumers need to start paying serious attention to their spending habits.
