UK Spending Priority Index
Has the UK got its priorities right when it comes to paying its bills.
• More than one in four bill payers (27%) is spending more
on household bills now than they did six months ago
• The most commonly highlighted reasons for this increase in spending has been the cost of food (78%) utility bills (73%) and increase in transport costs (58%)
• All consumers surveyed considered their top four bills that must be paid before all others to be: utility bills (83%), council tax (77%), mortgage/rent (74%) and insurance (49%)
• Just 38% of consumers cited credit or store cards as a payment priority and just 15% said that they would prioritise paying off a personal loan
• Gym memberships (1%) and mobile phone (11%) bills feature lowest on the priority payment list
Research commissioned by credit reference agency Callcredit , www.callcredit.co.uk, has today revealed that over a quarter (27%) of UK consumers are spending more on their household bills than they did six months ago, with increases in food and utility bills being cited as the top two drivers. The research was commissioned in order to establish current pressures on household spending and where payment priorities lie in today's economic climate.
When asked to rank payment priorities, respondents would pay their mortgage first (64%), however utility bills also feature highly. However, just 38% of consumers cited credit or store cards as a payment priority and just 15% said that they would prioritise paying off a personal loan.
Gym membership (1%) and mobile phones (11%) featured as the lowest priorities for immediate payment except among 18-24 year olds where 30% view paying their mobile phone bills as important.
Encouragingly, the research also found that respondents were aware of the consequences of not paying their bills on time, whether they have increased or not. Almost a quarter of all respondents (24%) understand that by paying specific bills, they minimise the negative impact on their credit rating.
Graham Lund, MD at Callcredit comments: "Banks and lenders have provided data to credit reference agencies for many years, but utility companies are starting to consider providing information. From their perspective understanding a customer's willingness and ability to pay may be relevant"
"In time this data from utilities should positively enhance consumers' credit profile. This is particularly true for infrequent or new users of credit, where the lack of payment history data may make accessing credit more difficult, particularly at a time when over indebtedness and responsible lending are at the top of lenders agendas."
Owen Roberts, head of www.callcreditcheck.com , comments: "As families continue to feel the pinch of the recession in spite of low inflation, it is encouraging to see that people understand the effects of not paying bills on time. However, it is worrying to see that comparatively few people would prioritise paying a bill relating to a credit card or personal loan. Missed payments like these definitely do show up on a credit report and a history of missed payments is likely to have a negative effect on an individual's ability to secure credit."
"Consumers who are struggling to pay their bills should speak with their lenders or service providers before things become unmanageable or get in touch with an independent organisation such as the Consumer Credit Counselling Service to work out the best way forward."
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2027 adults. Fieldwork was undertaken between 2nd-5th October 2009. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
About Callcredit Check
• Callcredit Check is the consumer arm of
credit reference agency Callcredit, providing consumers with
instant online access to their credit report and services to help
them monitor their credit status.
• Callcredit is the UK's most innovative and customer-focused Credit Reference Agency, with an established reputation for service differentiation; focusing on listening to clients and creating innovative solutions that deliver real business value. Find out more at www.callcredit.co.uk
• Callcredit is one of six core businesses that form the
Callcredit Information Group (CIG). CIG brings
together experts across the fields of credit referencing, marketing
services, interactive solutions and consultative analytics to
enable our client base of businesses and consumers to make informed
decisions using our innovative products and services.
The group is made up of two complementary divisions:
? Credit Solutions, encompassing
Callcredit, Legatio and DecisionMetrics -
specialists in credit risk, ID verification services and tracing
? Marketing Solutions, providing specialist knowledge in customer analytics, consumer targeting, database building and hosting, marketing communications, business modelling and market analysis through three market leaders in their own fields: EuroDirect, Broadsystem and GMAP Consulting.