Press release: Scots continue to cut spending
A new research by the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread pessimism about Scotland’s economic outlook.
22nd November 2022
Image credit: Photo by Andrew Seaman free from Unsplash 22.11.2022
New research published today by the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread pessimism about Scotland’s economic outlook.
9 in 10 Scots (93%) believe general economic conditions are worse now than they were this
time last year and 77% believe the situation will deteriorate further over the coming year.
6 in 10 people (62%) are planning to spend less on restaurants and hotels and 58% are
planning to cut down on leisure and culture spending over the next 12 months.
Almost 1 in 2 (48%) plan to spend less on clothing and footwear.
7 in 10 (68%) already report not turning the heating on when they otherwise would have
and nearly 1 in 5 (17%) of people have skipped meals to save money
Intentions to cut spending have increased for every good and service listed in the survey
since Understanding Scotland began, posing a big challenge for the Scottish economy and
particularly the hospitality sector.
The new Understanding Scotland polling has found that 8 in 10 (79%) of people view the economy as it is currently organised as working primarily in the interests of the wealthy, while 65% of people feel their financial situation has worsened over the past year.
Wrong direction?
Just under half of people (49%) believe that things in Scotland are heading in the wrong direction, the highest percentage providing this answer since Understanding Scotland was launched last year. Dissatisfaction with income levels remains high, with almost 1 in 2 (46%) of people dissatisfied with their income level and a further 55% dissatisfied with their income’s ability to cover the cost of living.
People from the most deprived areas are also being increasingly pushed into financial precarity. One in five (20%) have had to borrow money from family or friends and 19% have used a buy-now-pay-later scheme when they otherwise wouldn’t have. This is despite 22% of this group having changed or looked at changing jobs to earn more and 15% trying, unsuccessfully, to take on more hours/paid work.
During these tough times, 2 in 5 (40%) of people have reduced their donations to charity, while rising prices and inflation are pushing 1 in 5 (22%) of people to cut down on portion sizes to save money.
People from the most deprived areas plan to reduce spending on essentials further this next year: almost 2 in 5 (37%) plan to spend less on eating out and household goods and services (38%).
Parents feel the pinch
Parents, in particular, are feeling the pressure of current economic turmoil: almost 2 in 3 (64%) are dissatisfied with the ability of their income to cover the cost of living and nearly 3 in 10 (28%) reflect that their current financial situation is much worse than it was 12 months ago. This pressure has resulted in more than 1 in 3 (35%) of parents losing sleep due to stress or anxiety about personal finances and higher percentages of parents reporting borrowing money from family or friends and using credit cards or buy now pay later schemes than people without children.
Amidst predictions of further tough times to come following the Autumn Statement, these statistics raise questions of how much worse things can get and how current economic conditions will impact other issues of rising concern among survey respondents, such as poverty and inequality and healthcare and the NHS.
Reflecting on the findings, Mark Diffley, founder and director of Diffley Partnership who conducted the research, said:
“The public in Scotland continue to have widespread concerns about both the of the state of the economy and their ability to cope with the ongoing cost of living crisis.
Although concern and anxiety are widespread, we continue to see those in the most precarious situations feeling most vulnerable and ill prepared, particularly those who live in the most deprived parts of Scotland.
Despite a modest fall in pessimism about the economy over the next year, policymakers and business will be concerned with the finding that spending on non-essential items, like leisure, eating out and holidays, is likely to fall significantly over the coming year.”
Susan Murray, Director of the David Hume Institute, who helped to develop the survey, added:
“The cost-of-living is continuing to have prolonged effects in the ways in which people are choosing to spend their money. Hospitality and culture industries are being hit hardest as people cut back spending due to rising food and heating costs.
Although Scots are less pessimistic about the state of the economy next year, we are still witnessing significant financial stress among families with more than one third of parents losing sleep due to financial stress.”
ENDS
Notes to editors:
Designed by the Diffley Partnership, the survey received 2,191 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 3rd - 8th November. Results are weighted to the Scottish population (2020 estimates) by age and sex.
About Understanding Scotland: Understanding Scotland is a high-quality quarterly survey that delivers insights into Scottish behaviours and attitudes towards society, the economy and the environment. The survey fills a vital gap in research, providing the socioeconomic insights and indicators needed for effective decision-making, with regularity and timeliness.
Press release: nine in ten Scots anticipate a recession and worsening inflation
New research finds despite households’ best efforts to cut their outgoings, many are still struggling to make ends meet.
Press release from the David Hume Institute and the Diffley Partnership
30th August 2022
Image credit: photo by David Clarke free from Unsplash 30.08.2022
Overwhelming majority say UK and Scottish governments have done too little to help with soaring prices, as nine in ten Scots anticipate a recession and worsening inflation.
New research produced in partnership between the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread anxiety and pessimism about Scotland’s economic outlook.
8 out of 10 people are cutting down on non-essential items and leisure, and over a quarter of people are skipping or cutting down on meals to save money
3 in 10 people in Scotland are now losing sleep over their finances
The overwhelming majority think support from the UK (89%) and Scottish (73%) governments thus far has been insufficient
The Understanding Scotland survey found that 87% of people in Scotland expect the soaring cost of living to cause a recession, and more than nine in ten expect things to get worse before they get better.
Despite households’ best efforts to cut their outgoings, the support on offer from governments is widely seen as inadequate. 64% of people report feeling worse off now than over the past year, and 57% say their income does not satisfactorily cover their cost of living, rising to 73% and 71% respectively in the most deprived neighbourhoods.
Eighty per cent of people have cut down on leisure and/or non-essentials, and over a quarter of people are skipping or cutting down on meals to save money. Despite these efforts to economise, including by foregoing basic necessities, 89% and 73%, respectively, say that the UK and Scottish governments have done too little to help.
There is particular hostility towards energy companies: 95% of people think they have done too little to help people cope with rising prices, and a fifth of people think that the single biggest cause of soaring inflation is companies maximising their profits. This is only just behind the war in Ukraine at 21%, and ahead of pandemic-related supply chain issues at 12%.
Rising prices, in the absence of further support, have seen large numbers of people pushed into greater vulnerability and riskier behaviours. Two in five have depleted their savings, and over a third (35%) have taken on debt and/or borrowed money. The latter figure rises to 44% in the most deprived neighbourhoods, 20 percentage points higher than in the most affluent.
The impacts of soaring prices are not being felt equally across society. Rather, they are hitting the already vulnerable hardest, with 73% of people in the most deprived fifth of neighbourhoods reporting that they feel worse off now than over the past year, compared to 60% in the most affluent areas.
While 80% of people believe that salaries and wages should rise in line with inflation, only a third say they would feel comfortable asking their employer for a pay rise and far fewer - less than 7% - have actually done so. Women, young people, and those in part-time work - already more likely to be in low-paid positions - are especially uncomfortable doing so. The ‘wage-price spiral’ counterargument - that higher wages only serve to drive up demand and inflation - does not appear to have much traction, with only 4% of people deeming this the primary cause of inflation. Only eight per cent of people believe that pay should not rise in line with inflation, a tenth of the proportion that said it should.
Reflecting on the findings, Mark Diffley, founder and director of Diffley Partnership who conducted the research, said:
“It is unusual to see the public mood being so unambiguously bleak. Financial pressures and anxiety at soaring prices are widespread across society, but particularly acute for those who are already most vulnerable. Across all demographic groups, and especially in more deprived communities, a clear majority are saying that the response to date from the UK and Scottish governments alike are simply not enough.”
Susan Murray, Director of the David Hume Institute, who collaborated on the survey, added:
“Since we started this survey, sadly most people have seen their financial situation deteriorate. With three in ten people now losing sleep due to financial stress, and over a quarter skipping or cutting meals, there are obvious consequences for the economy, labour market and people’s health. Eighty per cent of people have already cut down on non-essentials and leisure, and over a fifth have taken on or tried to take on more work, but it’s still not enough. Despite their best efforts, two-thirds of people say their money simply isn’t going far enough, and most expect things to get considerably worse before they get better. We need a concerted package of targeted support, and we need it now.”
ENDS
Notes to editors:
Designed by the Diffley Partnership, the survey received 2,227 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 4th - 8th August. Results are weighted to the Scottish population by age and sex.
About Understanding Scotland: Understanding Scotland is a quarterly survey tool measuring the most important facets of our lives and decision-making in Scotland: our society, economy, and environment developed by Diffley Partnership and Charlotte Street Partners. Understanding Scotland: economy is produced in partnership with the David Hume Institute.
Blog: The business of sleep
One in four people are already losing sleep over their finances and the cost of living crisis hasn’t fully hit yet.
This is bad news for people’s health and the economy.
by Susan Murray, Director, David Hume Institute
25th May 2022
Image credit: Photo by Peopleimages from iStock 30.06.2022
One in four people are already losing sleep over their finances and the cost of living crisis hasn’t fully hit yet.
This is bad news for people’s health and the economy. The long term health implications are well known for individuals living in a state of acute stress, with lack of sleep increasing the risk of health conditions such as obesity, heart disease and depression. Relationships suffer and the likelihood of family breakdowns increase.
These negative effects cause short and longer-term harm to the economy, as well as increasing public health costs. Lack of sleep affects your ability to make decisions and reduces productivity.
The cost of living crisis is already affecting individual lives and our research shows worrying signs for business too.
70% of people have already cut back spending on anything that isn’t essential. With the majority of Scotland’s business being small and medium sized, this reduction in spending will have a big impact.
Business leaders also have Brexit, labour and skills shortages, higher energy costs and supply chain issues to manage. Some have enjoyed unprecedented profits in recent times but others haven’t yet recovered from the pandemic. There are tough times ahead for many businesses in Scotland and for some, there isn’t any slack in the system.
It is understandable that many are calling on the UK treasury, bolstered by increased tax receipts, to step in swiftly with a basket of interventions aimed at reducing the length and depth of the recession. In the long term we need to create more resilience in the system, but with an increasing number of people experiencing hunger and struggling to heat their homes, looking to the long term now feels like a luxury.
Whilst the big actions rest with government, if you have money and are not on the breadline, are you thinking about the impact of your spending or charitable giving?
Making conscious choices with money - a priority people told us last year as part of the Action Project, is now even more important.
With so many people in work using foodbanks and skipping meals - work is clearly not a guaranteed way out of poverty. If you employ people, what support are you offering the lowest paid in the organisation? Big employers like John Lewis are openly speaking about the range of measures they have put in to help their lowest paid staff.
In small businesses it can be harder to offer holistic support to employees - and we have thousands in Scotland. For small businesses cash flow is often critical for keeping their heads above water. Although only a drop in the ocean in terms of the issues facing small businesses, paying invoices on time can make a big difference and saves hours of time chasing up payments.
Some rules are making it harder for those that are struggling most, and here regulators have a role to play. For example higher standing charges for prepayment energy customers. I can understand Martin Lewis’s anger at Ofgem - it seems as though our energy market is in desperate need of an overhaul.
The Understanding Scotland - Economy research shows the cost of living crisis is already affecting the majority of people in the country - a minority have savings and a cushion for the hard times ahead. Let’s hope the pending announcement from the Treasury does something rapidly to help or the prospect of a peaceful night’s sleep is a long way off for many people.
New research reveals widespread economic anxiety in Scotland
New research reveals widespread anxiety about Scotland’s economic outlook. The findings show a stark picture. 1 in 4 people are already losing sleep over their finances, showing the cost of living crisis is already impacting productivity and public health.
Press release from the David Hume Institute & Diffley Partnership
25th May 2022
A new survey produced in partnership between DHI and the Diffley Partnership has revealed widespread anxiety about Scotland’s economic outlook. Amid surging prices, the new Understanding Scotland - Economy survey finds:
A quarter of people have lost sleep due to stress over personal finances, rising to 3 in 10 people in the most deprived areas.
Adverse financial conditions have pushed many to forego basic necessities, with 3 in 5 going without heating, and more than a fifth skipping or cutting down on meals to save money.
Rising prices also appear to be pushing people into more vulnerable circumstances, with a third of people eating into their savings, and a quarter taking on debt. The equivalent figures are even higher in deprived areas, at 36% and 32% respectively.
While concern is widespread, rising prices have not hit everyone equally: 23% of people in the most deprived areas say their finances have become ‘much worse’, compared to 13% in the most affluent areas. Parents and families are also feeling the squeeze, with 43% of households with children having taken on debt or borrowed money. In addition, three quarters of those unable to work due to sickness or disability, and four fifths of the unemployed also report feeling worse off.
While the present picture is concerning, most people expect things to get worse before they get better. The poll finds that 84% of people believe that economic conditions in Scotland have deteriorated over the past 12 months, and 77% expect this downward trajectory to continue. A similar picture emerges with regards to people’s personal finances, which 62% judge to have worsened over the same time period, and 59% expect this to continue over the coming year.
Mark Diffley, founder and director of Diffley Partnership said:
“These are some alarming results with no silver lining in sight. Our polling finds extensive and, for some, acute anxiety over a cost of living crisis that is hitting people across all parts of society. A majority of people in all forms of work say that their incomes simply aren’t going far enough, and the picture is even more alarming for those out of or unable to work.”
Susan Murray, Director of the David Hume Institute said:
“These findings draw attention to the urgent need for action to help those at the sharpest end of surging prices. A quarter of people across the country are losing sleep because of worry about their finances and over half of people are cutting back spending. The potential long-term impacts on the nation's health and economy are huge.”
ENDS
Notes to editors:
Designed by the Diffley Partnership, the survey received 2,203 responses from a
representative sample of the adult population, aged 16+, across Scotland. Invitations were
issued online using the ScotPulse panel, and fieldwork was conducted between the 5th - 9th
May 2022, and received 2,170 responses from the adult population, aged 16+, across
Scotland. Results are weighted to the Scottish population (2020 estimates) by age and sex.
About Understanding Scotland: Understanding Scotland is a high-quality quarterly survey
that delivers insights into Scottish behaviours and attitudes towards society, the economy
and the environment. The survey fills a vital gap in research, providing the socioeconomic
insights and indicators needed for effective decision-making, with regularity and timeliness.