Older people ‘likely to curb current account spending first’

Older people in the UK are likely to reduce their spending before younger people, an expert has said.

Older members of the UK population are likely to be the first group to curb spending from finance outlets such as credit cards and their current accounts in the coming months.

That is according to Ed Bowsher, head of consumer finance at Lovemoney.com, who has said that consumer outlays from all people in Britain will inevitably be constrained by the government’s austerity measures and higher taxes following the global economic downturn.

However, Mr Bowsher feels that it will be the more senior members of society who react first to these changes – which may result in them putting more cash into savings accounts.

He explained that “as long as mortgage rates stay low”, many younger families will remain in a position whereby they can carry on spending for some time.

“Older people, however, won’t have that feel-good factor,” the expert added.

Mr Bowsher was speaking following the publication of a survey by MGM Advantage, which found that 75 per cent of Brits have altered their spending habits since the start of the recession.

Meanwhile, n expert has said household finances across the UK are set to decrease in 2011.

Families and individuals are set to face a period of tighter household finances in terms of expenditure on monetary options such as their current accounts and credit cards.

That is according to Michael Baxter, editor of online resource Investment and Business News, who has said that 2011 will mark a year of decreased availability of funds in many homes across the country – which could then lead to more people accessing their savings accounts.

Mr Baxter stated that household finances are largely dependent on the salaries being offered by companies in the aftermath of the recession.

“At the moment the average wage increases are lagging behind inflation, which means that average households are getting worse off,” he added.

This comes after the publication of a report by Genworth Financial last week (November 12th), which found that fiscal vulnerability among households in the UK has increased once more following the general election earlier this year.

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