More than half of financial services consumers in the United States and United Kingdom say their household income has been adversely impacted by the current economic crisis, according to a new Market Strategies International research study of 1,000 consumers that addresses a broad spectrum of financial services issues in both countries.
In addition 40 percent feel their personal financial situation is profoundly on the "wrong track." Another 46 percent of consumers in the U.K. and 26 percent in the U.S. no longer believe their money is safe anywhere. The study is designed to help financial services organizations better understand how the economic crisis has altered the mindsets of their customers.
As consumers react to the economic downslide, they are eating out less (65%, U.S.; 59%, U.K.), saving less money (48% U.S.; 53%, U.K), taking fewer vacations (54% U.S.; 47% U.K.) and using more discount coupons and vouchers more (56% U.S.; 52% U.K.).
"Even with this reduction in discretionary spending, about half of consumers in both countries are saving less," says Leona Foster, Market Strategies International senior vice president who was in charge of the study. "Baby Boomers are considerably more pessimistic about their personal situation today than Generation Y consumers."
Consumers are devouring information from news sources covering the collapse of financial organizations and large government bailouts which have hurt the images of credit card issuers and investment firms, while U.S. banks are maintaining a positive to extremely positive image with 53 percent of Americans and 38 percent of U.K. consumers.
Even among consumers who say their bank took government bailout money, less than half voice a negative impression of their bank.
"So far banks seem to be doing the best among all financial institutions in terms of maintaining the 'trust factor,'" said Mark Willard, Market Strategies International Senior Vice President. "But about half of those likely to seek alternative financial providers are doing so because of concern about their banks' financial condition."
Overall, most consumers feel their financial institutions aren't doing anything to make them feel better about the changes in the economy ¡ª 81% in the U.K. and 60% in the U.S.
Certificates of Deposit (CDs) and savings accounts are mentioned most often as "the safest place to invest money at this time" among 21% and 22% of U.S. consumers, while the more pessimistic U.K. consumers ¡ª nearly half say "nothing is safe" -- are favoring savings accounts (20%) and gold (12%).
"Consumer confidence amongst financial institutions remains very low in the U.K. in contrast to the U.S., said Bob Qureshi, Market Strategies International senior vice president who runs the company's London, England office. "Significantly more U.K. consumers say they have spread money around to multiple banks and the expectation is that this trend will continue to occur in the future."
The web survey was conducted by Market Strategies International from March 10-14 among consumers 21-70 years of age who are financial decision-makers or share in the task for the household.
