Press release: Scots continue to cut spending

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:

1. 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.

2. 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

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:

1. 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.

2. 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.