For over one in four of British adults (those aged 34 years old or under), the current economic downturn is the first recession they have experienced in adult life and while recession veterans are realistic about what to expect, recession novices are less prepared to change their lifestyles.
Recession expectations
Inexperience breeds optimism, with one in ten (11%) recession novices expecting the recession to end in 2009. In contrast, just 6% of recession veterans have their hopes on an economic upturn within this year, while 37% predict the recession will last until 2011 or longer.
Recession fears and worries
So how is the nation reacting to these choppy economic waters? More than one in five (21%) of all Brits - regardless of past experience - say the current climate has led them to suffer from ‘recession depression'. Nearly a fifth (17%) claim they have had sleepless nights worrying about their personal finances with over a third (36%) spending more time at home.
Two in five (41%) of people with recession experience are making a deliberate effort to keep up with the news by watching TV or reading the papers more. On the other hand, only 30% of recession novices are equally addicted to the news agenda. Recession novices are mainly concerned about the effect of the recession on their own lifestyles, such as fewer job and pay rise opportunities, having less money to spend and not being able to afford to pay their existing debts while recession veterans show greater concern for wider economic issues. Low interest rates, poor management of the economy by the government, a weakening economy and rising crime are much higher concerns for recession veterans than for those facing a recession for the first time.
Recession preparations
A third of recession veterans feel better prepared for today's economic woes because they have lived through a downturn before, although almost half (44%) acknowledge that it feels very different to last time. Many say their confidence comes down to better management of their finances with 68% feeling better prepared than recession first-timers because they are more careful with money and don't overspend (compared to 57% recession novices) and 66% say they are better prepared because they don't rely on credit to fund their lifestyles. Over half of those with recession experience (56%) simply think they are more realistic than younger generations about how much they can spend.
Corinne Sweet, Psychologist and author of "Stop Fighting About Money: How money can make or break your relationships" (Hodder) comments on the study: "When times are bad and money is tight, people experience fear and anxiety, making them more conservative and less adventurous and expansive overall. Recession novices will be feeling the greatest shock, and worrying about how to maintain their lifestyles while paying off debts, while those that have lived through it before will probably cope better, reverting to old methods of survival."
Recession remedies
When it comes to beating the economic blues, recession veterans are taking sensible steps to rein in their spending, such as buying cheaper brands (42%) and becoming more frugal. Novices are not prepared to take such drastic steps. Just 24% have reined in their spending a lot (compared to 30% of old timers) and only a fifth (20%) are becoming more frugal compared to 39% of recession old timers. Recession novices are also less prepared to cut back on holidays and breaks away with only a fifth (19%) cutting back on this luxury compared to a quarter of recession veterans.
Graham Lindsay, managing director, customer experience, Lloyds TSB comments: "Managing your finances during a recession is challenging regardless of whether you have experienced one before or not. If you have financial worries, facing them head on is always the best policy and having a plan of action puts you in control and helps to put your mind at ease. Our financial health specialists have been trained to help customers review their finances, manage their money better and give tailored guidance and support. Over 750 of our branches are open on Saturdays making it even easier to speak to somebody at a convenient time."
Throughout the country, 1,500 financial health specialists are on hand in Lloyds TSB branches. Lloyds TSB has also created a specific guidance microsite for people looking for financial help. ‘Savvy Guidance' www.lloydstsb.com/savvyguidance.com - is an online resource with a raft of useful tips and information on managing your money in the current climate. It also includes an interactive explanation of the credit crunch, a jargon buster, frequently asked questions and real life video stories showing how the guidance and support from a financial health specialist, can help in times of financial difficulty.
