Many Loans Taken To Pay For Luxuries
Two surveys carried out into the spending trends of consumers in the UK has revealed that many people are now taking out loans to finance luxury purchases rather than as necessities. In the past, many people that took loans out would borrow money for necessities such as repairs to the home, a vehicle to get around, or to fund a wedding or pay for education. However, the recent survey has revealed that consumers in the UK are now spending on luxuries such as plastic surgery and footwear, with many taking out loans to fund such purchases.
The surveys were carried out by Mintel and Sainsbury’s Bank. According to Sainsbury’s one in five of the loans that are taken out to fund plastic surgery are taken out by men, and the survey also suggested that each day around £1.8 million is being spent on plastic surgery in the UK. The Mintel report also showed the increase in spending when it came to items such as footwear, with people now purchasing shoes to go with specific outfits, with a thirty eight percent rise on the amount spent on shoes over the last five years.
Mintel retail research director Richard Perks stated: "Shoes are no longer seen as a clothing essential to be bought on a replacement basis only, they are now an integral part of the fashion of the day. What is more, people are now far more willing to buy a pair of shoes for a specific occasion or to go with one particular outfit."
The research suggests that as the consumer debt crisis in the UK continues to get worse, many people are continuing to take out loans for purchases that are classed by many as unnecessary luxuries. Many people also take loans without carrying out adequate research into the loan options available, and this often leads to them ending up with a raw deal on the finance that they take out.
Alisdair Milton
1st December 2006
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