Demand for savings, investment and borrowing products at record low

· UK consumers are turning away from financial services products.

· In the Q1 2012 38^th quarterly JGFR/GfK NOP UK Financial Activity Barometer only 65% of adults intend to save, invest, borrow or repay debt in the next 6 months, the lowest in the survey’s 10-year history. Compared to a year ago (63%), only 54% of consumers intend to save or invest with 11% intending to borrow (13%, December 2010) and 21% repay / pay down debt (26%, December 2010).

· This weak level of intending activity is likely to reflect stretched finances where 48% of households are just making ends meet compared to 44% a year ago and only 40% of households are currently saving (43%, December 2010).

· Prospects for the housing market have deteriorated following an improvement in demand in the past 2 quarters, with the JGFR Housing Confidence Index at a new survey low (43.9) compared to 53.4 a year ago and a previous low of 45.0 last March.

· Investor confidence is also at a survey low with more people (8%) intending to sell shares/unit trusts rather than buy shares/unit trusts (7%) – a survey first.

· Life & pensions demand is down sharply with only 32% of adults intending to contribute to regular or lump sum life or pension products, down from 37% in September and the joint lowest on record.

· In the main financial services provider market – currently at the heart of the retail banking debate over competition – Barclays and Lloyds TSB remain market-leading brands but with Santander for the first time claiming a top 4 MFSP position

· With financial activity levels in prospect very depressed this will impact on services sector demand and with consumer confidence falling 2 points to -33 (and 12 points below a year ago) ,the chance of a double-dip recession seem highly probable in the next 2 quarters.

· The New Year 2012 Financial Activity Bulletin will be published on Thursday January 12 providing a full analysis of the financial intentions of the UK consumer. For details contact John Gilbert 0208 944 7510 / 07740 027968