Pessimism over economy and Brexit triggers saving
Swindon, March 24, 2017
- People who feel negative about the economy and their personal finances are more likely to plan to save
- 60% of ‘remain’ voters are pessimistic about the UK economy compared to just 22% of ‘leave’ voters
- Less than one in five (19%) of 18-24 year olds feel optimistic about the UK economy compared to more than a third (36%) of over 65s
People who feel pessimistic about the UK economy or their own personal finances are more likely to plan to save more over the next 12 months to ensure they have a financial safety net, according to a Zurich survey of over 4,000 adults across the UK released today.
The findings suggest that current affairs have a significant impact on how people feel about the economy, with the two sides of the Brexit argument currently feeling very different about the future. Six in ten (60%) remain voters said they felt pessimistic about the economic outlook of the UK compared to just over one in five (22%) of those who chose to leave.
This negative attitude is also having an effect on how people view their own finances and how they plan to save. When asked about their personal financial situation, 32% of remain voters feel pessimistic compared to 27% of leave voters. Over a quarter (26%) of remain voters expect to save more money in the coming year. Meanwhile, less than one in five (19%) leave voters said they planned to save more, while 27% expect to save less in the next year.
Further to this, younger people appear more likely to feel pessimistic about the economy and therefore intend to increase their savings. As such, just under half (49%) of 18-24 year olds say that they are aiming to save more money in the next 12 months, compared to just 13% of 50-64 year olds.
How optimistic do you feel about the economic outlook of the UK?
18-24 year olds: 19%
50-64 year olds: 28%
Over 65s: 36%
The results of this survey, conducted by You Gov on behalf of Zurich, support the findings of a unique experiment from neuroscience specialists Mindlab. The Savings in Mind research tested 900 participants to measure the effect of emotions on savings. It revealed that people exposed to negative messages are more likely to consider the importance of savings than those who only experience positive messages, showing the importance of truly understanding savings behaviour and motivations in order to encourage and support saving for the long-term
Rose St Louis, at Zurich, said, “Behavioural change is often triggered by a negative stimulus, and our research shows this can prompt people to save more. Clearly, those who voted to remain in the EU are less confident in the economy than their ‘leave’ counterparts, and it seems the younger generation are taking action by choosing to put more money to one side. We should also recognise that consumer spending is a key driver for economic growth and if people are pessimistic and saving more, this could have repercussions for the wider economy.”
“While it is helpful to understand the impact of such pessimism, it is important that people are consistent and take control of their saving rather than letting this be dictated by external factors. Starting earlier and putting small amounts aside will help to build up a larger pot. By reviewing their investments to ensure they benefit from better returns, people can protect against volatility and the negative effects of inflation.”