Consumers are preparing for continued economic uncertainty

Consumers are taking greater control of their finances in an effort to ready their households for continued economic uncertainty, according to the latest Consumer Financial Monitor released by Corporate Executive Board. The survey, which included 18,500 consumers across 24 countries, showed increasingly negative feelings about savings and personal income levels that may be attributable to strains on budgets as food and fuel prices rise and remain high.
Consumers are making significant moves to lower their debt and place more income into savings. 16% of consumers (a 3% increase over Q1 2011) paid down debt sooner than expected and almost 25% of consumers placed more of their income into savings over the past year versus 21% in Q1 2011. At the same time 43% of consumers said they increased their debt or relied on savings to pay bills, a slight increase quarter over quarter.
While consumers looked to gain financial control, consumer confidence in financial providers’ ability to keep their commitments and promises, and offer clear and simple fees declined. In Q2 2011, 48% of consumers expressed low confidence that institutions could keep their promises as compared to 46% in Q1 2011 and 55% believed financial institutions lack simple pricing fees and policies (vs. 52% in Q1 2011).