international personal finance n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
International Personal Finance PowerPoint Presentation
Download Presentation
International Personal Finance

Loading in 2 Seconds...

play fullscreen
1 / 48

International Personal Finance - PowerPoint PPT Presentation


  • 91 Views
  • Uploaded on

International Personal Finance. Wave 2 Report. August – October 2012. Contents. Background/Methodology Economic Outlook Financial Holdings Use of Credit Services Standard of Living Conclusions & Recommendations. 1. Background/Methodology.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'International Personal Finance' - korene


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
international personal finance
International Personal Finance

Wave 2 Report

August – October 2012

slide2
Contents

Background/Methodology

Economic Outlook

Financial Holdings

Use of Credit Services

Standard of Living

Conclusions & Recommendations

slide3
1

Background/Methodology

slide4
IPF currently provides consumer credit to 2.5 million customers, across six international markets. The business offering is unique for the markets in which IPF operates.

This project is designed to engage with IPF’s customer base, understand the issues they have and their feelings towards the society in which they live, and how they can be better represented in the political and commercial worlds.

IPF wishes to use this research to enhance its unique position as a mouthpiece for the lower socio-economic demographic amongst key groups of decision-makers.

This was the second wave to be run using the IPF panel with more targeted questioning and the survey opened up to a significantly larger proportion of IPF customers.

Background

slide5
Methodology

The process was adjusted for this wave in order to invite new registrants as well as the existing panel

YES

Take survey now

Registration survey

Invitation from IPF to register for the panel

NO

Take survey later

Reminder to take survey

No response

Email invitation from YouGov to take Wave 2

Wave 2 survey

Complete now

Happy to take survey

Call from IPF inviting customer to take part in Computer Assisted Telephone Interview (CATI)

Refused to take part

IPF customers not previously invited

IPF existing panellists

IPF customers without email addresses

slide7
2

Economic Outlook

slide8
Two in three Provident customers consider the cost of living to be of most concern currently
  • …however this drops significantly when looking at the CATI respondents
  • They are twice as likely to be concerned about losing their job, and the cost of health services

Which of these is of most concern to you currently? Base: All (10,833), Online (10,191), CATI (642)

slide9
Cost of living is the biggest concern in Czech Republic
  • Younger people are far less concerned about the cost of living but worry more for their job stability

Which of these is of most concern to you currently? Base: All in Czech Republic (1,379)

slide10
Four in five Hungarians are concerned over the cost of living, more than any other market
  • Very few people in Hungary claim to have no concerns

Which of these is of most concern to you currently? Base: All in Hungary (5,168)

slide11
In Mexico, crime in the neighbourhood is the single largest concern
  • This is perhaps reflective of the current situation with high rates of drug crime
  • Concern over job stability is also high in Mexico, but the cost of living is of relatively little worry

Which of these is of most concern to you currently? Base: All in Mexico (344)

slide12
Half of Poles worry over the cost of living while a quarter are concerned about the security of their jobs
  • Overall, Poland has the highest percentage of respondents who have no concerns
  • Employment uncertainty is most prevalent among 25-34 year olds

Which of these is of most concern to you currently? Base: All in Poland (1,406)

slide13
Romanians are most concerned about the cost of living, and this only increases with age
  • But very few worry about the cost of education, most surprisingly amongst the 18-24 year-olds

Which of these is of most concern to you currently? Base: All in Romania (2,164)

slide14
Cost of living is of most concern in Slovakia, particularly for those in the 35-44 age group
  • Worries over loss of job consistently increase with age
  • Women are significantly more likely to be concerned about the cost of living (66% vs. 57% of men)

Which of these is of most concern to you currently? Base: All in Slovakia (372)

slide15
The general economic expectation is low, with three in five expecting things to get worse in the next 12 months
  • This wave of negativity is notably higher in the more northerly countries, Poland, Czech Rep and Slovakia
  • However, there is a fair amount of confidence in the stability of the Mexican economy, with one in three expecting it to remain at the same level
  • Romanians are those most likely to expect economic improvement, reflecting the growth in GDP that they are currently experiencing

Thinking of the next twelve months, do you expect the economy in your country to get better or worse? Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide16
Overall, there are an equal number of people expecting their household situation to get better or to get worse
  • Increase in earnings is the main factor anticipated to boost household income for those expecting improvement
  • The cost of living is perceived as the key contribution to a worsening of household finances

Thinking now of the financial position of your own household, over the next twelve months, do you think your financial position will get better or worse? You say that you think your financial position will get better/worse, which of these could explain why things will change? Base: All (10,833)

slide17
Over half of Mexicans and Romanians expect the financial position of their household to improve in the coming year
  • This will mainly be driven by an increase in earnings or a change in job
  • Increased living costs and job instability are expected to contribute to household economic decline, particularly in the Czech Republic and Hungary

Thinking now of the financial position of your own household, over the next twelve months, do you think your financial position will get better or worse? You say that you think your financial position will get better/worse, which of these could explain why things will change?

Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide18
Household economic situation summary
  • The percentage of Czechs expecting their household financial situation to worsen increases with age, from 62% amongst 18-34s to 81% for the over 55s. This is mostly attributed to the cost of living. Expectation in Romania also trends with age in the same way.
  • 29% of Hungarian men expect improvement compared with only 21% of women. The men are especially confident of a positive shift in their employment circumstances
  • A similar pattern prevails in Poland (37% of men expecting better situation against 27% of women)
  • In Mexico, those who are married without children are most positive about their household situation, particularly when compared with single parents and families with children
  • Of those in Slovakia who expect their situation to decline, the younger are most likely to cite the increased cost of living
slide19
3

Financial Holdings

slide20
Bank account ownership is noticeably low in Romania and Mexico
  • Motor insurance and retirement savings are most common amongst residents of the Czech Republic and Slovakia
  • Half of Poles have life insurance, while Hungary has the highest mortgage uptake

*

Which of these products do you have? Choose as many as apply.

Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

*Not relevant in Mexico

slide21
Just under half of the Czech respondents do not have any cash savings
  • The average monthly expenditure on repayment of debts is more than half the average level of savings

Cash savings

Total debt

Repayments

Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Czech Republic (1,379)

slide22
Three quarters of Hungarian respondents have no savings
  • Two in five have debts greater than 400k forint

Cash savings

Total debt

Repayments

Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Hungary (5,168)

slide23
Very few Polish respondents have savings of more than 2,500 PLN
  • A third have debts greater than 10k PLN, with only 3% having no debts at all

Cash savings

Total debt

Repayments

Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Poland (1,406)

slide24
Debts in Romania appear to fall in the higher brackets of 1,000 or more lei
  • Three in five are paying more than 250 lei per month in repayments

Cash savings

Total debt

Repayments

Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Romania (2,164)

slide25
Over half of Slovakian respondents have cash savings, higher than any market except the Czech Republic
  • Debts are typically lower than €5k and over half of repayments are subsequently less than €300

Cash savings

Total debt

Repayments

Do you have any cash savings? If so how much? Thinking now of all your borrowings, which of the following ranges would your total debt fall into? How much do you spend each month on repaying credit and loans? Base: All in Slovakia (372)

slide26
Financial Holdings summary
  • In the Czech Republic, levels of debt are highest amongst those aged 25-44; in Hungary it is the older generation who find themselves most in the red
  • In Poland, debt levels are very similar amongst men and women. Strangely, the employed (full-time workers and the self-employed) have higher debt levels than those out of work
  • Romania has a rather unorthodox pattern of debt levels rising in line with increasing salaries – this would seem to contradict traditional expectations
  • There are no results for Mexico as these questions were excluded from the Mexican survey
slide27
4

Use of credit services

slide28
For the majority of Eastern European customers of IPF, home credit is the most widely used form of credit
  • However, in Mexico it is personal credit that is most often used
  • The older age groups tend to access other forms of credit more than their younger counterparts

Which of these credit products have you used within the last three years? Choose as many as apply.

* In Mexico, Bank overdraft and Credit Union loans were replaced with Personal Credit and Microcredit

Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide29
The general perception is that it has become more difficult to get credit in the last few years
  • This is very apparent in Hungary, where three in four believe it is now harder to get credit
  • Only in Slovakia do more than one in five believe it has become easier

Would you say that is has become easier or more difficult to get credit in the last two to three years? Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide30
Just over half of respondents believe that they can comfortably afford their repayments
  • A third of people use credit on a regular basis as part of their household budgeting
  • The overwhelming majority claim to think carefully before they borrow money

Please indicate whether you agree of disagree with each of the following statements… Base: All (10,833)

slide31
Czech respondents claim to be better placed to meet their credit repayments than the average IPF customer
  • Single individuals without children are most likely to afford repayments (81%)
  • Impulsive credit usage seemingly decreases with age (34% of 18-24s vs. 17% of 55+)

Please indicate whether you agree of disagree with each of the following statements… Base: All in Czech Republic (1,379)

slide32
Only two in five Hungarians can comfortably afford their repayments
  • This concern increases with age, and is more common amongst women
  • Credit usage is not exclusive to unemployed or lower income respondents, but relatively consistent across all levels

Please indicate whether you agree of disagree with each of the following statements… Base: All in Hungary (5,168)

slide33
Mexico has a much greater level of control when it comes to obtaining credit
  • …Very few borrow the maximum amount they can get, and four in five assess how much they can repay before borrowing
  • Women are far more likely to use credit as part of their regular budget (45% vs. 30% of men)

Please indicate whether you agree of disagree with each of the following statements… Base: All in Mexico (344)

slide34
Nearly half of Poles usually borrow as much as the lender will give
  • But only one in four use credit as part of their regular budget management
  • Those aged 25-44 tend to be the group who most consider whether they need credit before borrowing

Please indicate whether you agree of disagree with each of the following statements… Base: All in Poland (1,406)

slide35
Two-thirds of Romanians can comfortably afford their credit repayments
  • This is significantly more common amongst men (69%) compared to women (59%)
  • Single individuals without children are far more likely to use credit impulsively

Please indicate whether you agree of disagree with each of the following statements… Base: All in Romania (2,164)

slide36
A quarter of Slovakians use credit on impulse, higher than any other market
  • Three in five borrow as much as the lender will give, but conversely, the same number believe they can comfortably afford the repayments
  • 44% of men use credit as part of their budget compared to only 28% of women

Please indicate whether you agree of disagree with each of the following statements… Base: All in Slovakia (372)

slide37
Advice from a consultant is considered the most important aspect when taking out a loan
  • This is closely followed by product literature in the form of brochures and websites
  • Czech & Slovak respondents prefer to take advice from relatives and friends
  • Poles use the internet as their most important consideration

What aspects would you consider the most important when taking out a loan? Choose up to three..

Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide38
5

Standard of living

slide39
Four in five respondents are spending more cautiously than previously
  • Hungarians have become particularly frugal with nine in ten spending more cautiously in the last 12 months
  • The Czech & Slovak respondents have kept their spending the most stable

Thinking about day-to-day spending over the last twelve months, which of the following would apply to how you have approached spending in current economic conditions? Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide40
Three quarters of respondents have been put off making major purchases in the last 12 months
  • Hungarians and Mexicans have been particularly put off
  • Women and the older generation are those more likely to have steered away from major purchases

I have been…

All

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

…put off making major purchases unless absolutely necessary

76%

67%

83%

81%

67%

73%

61%

…just as likely to

make a

major purchase as any other year

15%

24%

11%

6%

23%

15%

20%

…more likely to make major purchases this year

4%

6%

2%

7%

5%

7%

9%

Not sure

5%

3%

4%

5%

5%

5%

10%

And still thinking now about the last twelve months, but this time about spending on major purchases. Which of these best describes your own spending behaviour? Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide41
The overwhelming majority would find it difficult to find money for an emergency payment or to save for a major purchase
  • However, a quarter of Mexicans believe they can easily find the specified sum
  • Women claim it would be much harder for them to save (45% vs. 30% of men)

All

Czech Rep

Hungary

Mexico

Poland

Romania

Slovakia

If you were to face an emergency or an unexpected bill or expense how easy or difficult would it be for you to find -amount- without borrowing?

How easy or difficult would you find it to save -amount- for a major purchase of something that you needed?

Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide42
One in three people are not satisfied with the standard of living in their household
  • A worryingly low number of Hungarians are happy with their lot, although more than half are unsure how they feel
  • Comparatively, almost half of Mexicans are satisfied with their standard of living

Generally, how satisfied are you with the overall standard of living of your household?

Base: All (10,833), CZ (1,379), HU (5,168), MX (344), PL (1,406), RO (2,164), SK (372)

slide43
Standard of living summary
  • Older Czechs are likely to be more cautious with their spending in comparison to their younger compatriots. However, those aged 18-34 have kept their spending stable rather than increasing it
  • Unsurprisingly, in Hungary, those in the higher income brackets are less likely to defer major purchases unless they are absolutely necessary
  • The lower earners would also find it very difficult to raise enough money to make an emergency purchase without using credit
  • A third of Mexican men believe themselves to be capable of saving for a major purchase, compared with only 19% of women
  • Satisfaction with their standard of living is highest among 25-44s and those who are married with children in Poland
  • In Romania, the self-employed are those most satisfied with their standard of living (40%). This is double the number of employed who feel satisfied.
  • Women in Slovakia are significantly more likely to find it difficult to raise the money to pay for an essential purchase (73% vs. 83% of men)
slide44
6

Conclusions & Recommendations

slide45
Arguably the most significant finding from the research is that only one in five respondents are satisfied with their current standard of living

The cost of living is the most frequently cited concern that people have. This is unsurprising in a global market where there have been significant rises in food and fuel prices amongst other things

The rise in the cost of living is a key driver in the perception of the majority of respondents that their household economic situation will get worse in the next twelve months

On a macro level, expectation is that the respective national economies are also likely to decline in the next year. However, Mexicans & Romanians have much greater confidence in their economies, reflecting the reforms recently proposed by the Mexican government and the rise in GDP in Romania

Summary of findings (1)

slide46
In each market except the Czech Republic, at least half of people have no savings, stalling their chances of building household economic stability

Home credit is the form of credit most widely used amongst IPF customers in Eastern European markets. Personal credit is most cited in Mexico

The general perception is that it is becoming increasingly difficult to attain credit. For those who have, affordability is a key issue, with half saying it is a challenge to meet their repayments

There is a worrying trend identifying a third of people using credit as a component of their home budget management. This contradicts the suggestion that nine in ten only use credit in emergencies

Reliance on credit is perpetuated by the notion that individuals find it difficult to raise money for an emergency purchase, or even to save for a major acquisition

Summary of findings (2)

slide47
People consider being able to get advice from a lender as the most important aspect when finding a credit agency to borrow from. However, a large proportion now look to the internet, highlighting the increase in access amongst the lower economic classes worldwide

Reflecting the times, people are currently spending more cautiously than previously. Few have kept to the same levels of spending, let alone increase it. Major purchases are being deferred by most

Summary of findings (3)

slide48
What items are influencing the perceived increase in living costs?

What factors are affecting the opinion that there has been a decline in both national and household economic decline?

What have respondents cut back on in order to decrease their level of spending?

In what way are IPF customers using credit as part of their household budget? Have they always had to rely on credit to meet their needs? If not, what has changed to bring this situation about?

Potential subjects for revisiting