Britons defy logic by feeling less financially vulnerable

by Gill Montia

Story link: Britons defy logic by feeling less financially vulnerable

Britons are feeling less vulnerable about their financial futures in a mood change “fuelled by increased consumer optimism”.

According to the 2009 Genworth Index, which measures financial vulnerability, the UK scored 10, which apparently leaves the country “tipped towards financial vulnerability” but is an improvement on this time last year.

Almost a quarter of respondents felt that their financial position will improve over the next 12 months, compared to 15% in the 2008 survey.

In addition, the number of respondents expecting their situation to get worse more than halved from 36% in 2008, to 13% in 2009.

The study also revealed that the changes experienced in UK were far greater than the average for the 14 European countries surveyed.

However, the number of Britons experiencing financial difficulty has continued its upward trend, with 16% saying that they “often” or “always” experienced financial problems, compared to 13% in 2008.

Genworth global managing director of lifestyle protection, Peter Barrett, comments: “This begs the question upon what, specifically, is this new sense of optimism based?”

According to further research aimed at answering the question, “the primary reason for consumers feeling more positive comes from factors relating to households’ own circumstances, whether these related directly or indirectly to economic factors or to personal circumstances more generally”.

These factors include people becoming more financially prudent, being encouraged to sort out their finances and reducing their levels of personal indebtedness.

The Index, now in its third year, was designed by the University of Bristol and the European Credit Research Institute.

The 2009 study was conducted by Ipsos MORI across 14 European countries, surveying 14,000 respondents in all.