MFS Survey of Personal Finance
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MFS Survey of Personal Finance

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MFS Survey of Personal Finance MFS Survey of Personal Finance Presentation Transcript

  • Home Credit: Results from the MORI Financial Services survey of Personal Finance September 2005
  • Results from the MORI Financial Services (MFS) survey of Personal Finance MFS conducts a comprehensive continuous survey that is widely syndicated to many organisations operating in the personal finance sector. The CC used this survey: a) to ask additional questions to those respondents who currently use or have ever used home credit (HC) and b) to explore and compare the profiles of current and paid-up HC users, non-HC users and users of mainstream credit products*. *Defined here as overdrafts, credit cards and personal loans.
  • The sample: • MORI interviewed a total of 6,121 adults aged 16+ in their homes over a period from 23 June to 26th July 2005 • The 6,121 respondents can be classified into the following groups: • Current HC users (160) • Paid-up HC users (272) • Non-HC users (5,473) • ‘Mainstream’ credit users* (1.453) *Defined here as overdrafts in use, credit cards and personal loans.
  • Can you tell me how long it is since you took out your first HC loan?* 50% 40% Percentage of Current User 30% 20% 10% 0% Less than one year At least a year but At least 2 years but At least 5 years but More than 10 years Don't know / ago less than 2 less than 5 less than 10 ago Refused Current Users Paid-up Users One third of current customers have used home credit for at least five years. *This question was asked of current and former HC users (432 responses in total).
  • How long is it since you paid off your last HC loan?* 40% 30% Percentage of all paid up customers 20% Less than a Year At least 10% a year but less than two years 0% Less than 2 years At least 2 years but less than At least 5 years but less than More than 10 years ago Don't know / Refused 5 10 56% of paid up customers stopped using HC more than five years ago. *This question was asked of former HC users only (272 responses in total).
  • Why did you stop using HC?* 50% 40% 30% 20% 10% 0% I do not want I currently do I discovered I was not I now have My agent no I moved I cannot Other None of Don't know to take on not need cheaper satisfied with access to longer calls away from borrow as these any more any form of sources of the service I other forms the area much as I debts credit credit got from of credit that would like on home I did not home collected have before collected credit credit 29%** stop using HC because they found alternative sources of credit. 68%*** of former HC users stopped using HC because they do not require any form of additional debt. Most respondents in the ‘other’ category say they stopped using HC because it was too expensive. *This question was asked of former HC user only (272 responses in total). Respondents were able to give multiple answers. ** 22% answered ‘I discovered cheaper sources of credit; 9% answered ‘I now have access to other forms of credit that I did not have before. *** Percentage of former HC users who answered either ‘I do not want to take on any more debts’ and/or ‘I currently do not need any form of credit’.
  • How likely is it that you will use HC again?* 100% 90% 80% 70% Percentage of Group 60% 50% 40% 30% 20% 10% 0% Current Users Paid up less than 12 months ago** Paid up more than 12 months ago Group Likely Neither likely nor unlikely / don't know Unlikely Don't know ** Number of respondents: 26 Note: Small Sample Current customers say they are more likely to use HC again than paid-up customers. Over half of current customers are likely to use HC again. 81% of paid up HC users say it is unlikely that they would HC again in the future. *This question was asked of current and former HC user (432 responses in total).
  • Why would you use HC again?* 80% Percentage of current user / paid up customer 70% 60% 50% 40% 30% 20% 10% 0% For a special If you had an For a planned Because I If something To help pay off To go shopping None of these Other occasion like urgent need for purchase for always think of came up that another debt for anything you Christmas or a money the family, home collected you hadn't fancy birthday home or holiday credit when I planned for need money Current Users Paid-up Users The most common reason for using HC again is ‘Special Occasions’ (for current customers) and ‘Urgent Need’ (for paid up customers). *This question was asked of current and former HC user (432 responses in total). Respondents were able to give multiple answers.
  • Thinking about your personal finances in general, would you say that compared to two years ago they have got better, stayed the same or got worse? 50% 40% 30% Group 20% 10% 0% All respondents Current Users All paid up users Percentage of Group Got better Stayed about the sam e Got worse Current and paid up HC users were slightly more likely to say that their financial situation had got worse over the past two years. *All participants were asked this question (6,121 responses in total).
  • Profile of HC users and other groups
  • Gender 100% 80% Percentage of Group 60% 40% 20% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group Female Male HC users are more likely to be female than male. This is not the case for mainstream credit users.
  • Age 100% 80% Percentage of Group 60% 40% 20% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group 16-24 25-34 35-54 >55 A higher proportion of HC users is below the age of 35, compared to non-HC users. This is also the case of mainstream credit users, although to a lesser extent.
  • Socio Economic Profile 70% 60% 50% Percentage of Group 40% 30% 20% 10% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group Class AB Class C1 Class C2 Class DE A higher proportion of HC users fall into socio economic grades D and E, compared to non-HC users. The socio economic profile of mainstream credit users is similar to that of non-HC users. The socio economic profile of paid- up HC users is similar to that of current HC users.
  • Employment Status 80% 70% 60% Percentage of Group 50% 40% 30% 20% 10% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group Working full or part time Housewife Retired Unemployed Students / Others Housewives and unemployed represent a higher proportion of HC users than main stream credit users.
  • Personal Income 60% 50% 40% Percentage of Group 30% 20% 10% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group <£7,500 £7,500-£13,499 >£13,500 Don't know / Refuse A higher proportion of current and paid up HC users fall into lower income groups, compared to non-HC users and mainstream credit users. Note: high proportion of refuse / don’t know.
  • Household Income 50% 40% Percentage of Group 30% 20% 10% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group <£9,500 £9,500-17,499 >£17,500 Don't know / Refuse A higher proportion of current and paid up HC users falls into lower income groups, compared to non-HC users. A higher proportion of all mainstream credit users falls into higher income groups, compared to non-HC users. Note: high proportion of refuse / don’t know.
  • Housing Tenure 100% 80% Percentage of Group 60% 40% 20% 0% Current HC users Paid-up HC users Non-HC users Mainstream credit users Group Council/Housing Assoc. Own House Rented from private landlord /other A high proportion of current HC users rent from local councils or from housing associations, compared with paid up HC users, non-HC users and mainstream credit users.