Consumers push on with plans but fail to learn lessons

The majority of people in the UK (81%) haven't let the recession affect their life plans for 2010, such as getting married, planning a family or setting up a business, according to new research from Clydesdale and Yorkshire Bank.

In the UK-wide survey, the Banks' research revealed that, contrary to popular belief, the vast majority of people were not deterred from big decisions for 2010, such as tying the knot, getting divorced, having a child or even taking a year out to go travelling, by the economic downturn.

For the minority who did alter their plans, it was the potentially largest financial decision - moving home, that has been put on hold, with the younger generation being most likely to delay these plans.

Those in their 20s are most likely to have altered their plans as a result of the recession, with 36% putting off some major expenses. The research found that roughly four out of ten 20 somethings (41%) had decided to delay plans to move home.

When asked about more general spending plans, like holidays, almost two-thirds (60%) of adults, say they are pressing on regardless.  Only one in eight adults suggested they would be cancelling plans for a holiday this year, and a similar number said they would simply spend less on one.  And, with what might be a boost to the motor industry, just 6% said they had decided not to change their car in 2010.

Across the UK, the affect on spending plans varied. The South East, where house prices have been impacted heavily, half said they would be cutting back.  In contrast, West Midlands and Wales were most likely to stick with their plans, with over two-thirds saying their plans were unaffected.

Not learning lessons

While the British public's spending plans seem relatively unaffected by the economic downturn, Clydesdale and Yorkshire Banks' research also revealed that almost 60% of those questioned believe they have not learned any financial lessons from the recession.

The Banks' research suggests that the older generations, who have been through tough economic periods before, have already learned the important lessons. This is in contrast to those in their 20s and 30s, who were experiencing living through a recession for the first time, and have been learning the hard way.  Only 23% of those in their 70s say they have learnt any financial lessons compared to almost half of those in their 20s and 30s.

Regionally, there was a varied response on the matter of financial lessons; almost three quarters (73%) of people in the East Midlands claim to have learned no financial lesson as a result of the recession, closely followed by 68% from Yorkshire & Humberside and 62% in Scotland.  Whereas around half of those in the North East and North West say that they have learnt a financial lesson.

Steve Reid, retail director, Clydesdale and Yorkshire Banks, said: "The fact people have pressed on with plans for big ‘life events' such as weddings or having a baby, probably suggests good financial planning, as these events generally allow for a fairly long planning phase. But we see a bigger impact on the more general spending and luxury purchases, where the money is coming from a monthly salary.

"This is a good financial lesson in itself; by saving regularly you can build that nest egg for any occasion - particularly those smaller events or unplanned occurrences that can be financially painful.  If nothing else, we should all see the benefit of having a financial cushion to fall back on."