One in seven see recession ‘as the norm’

Five years to the day after the start of the credit crunch, when Northern Rock collapsed, a total of one in seven (14 per cent) Brits believe their finances will never be the same again.

Research conducted by MoneySupermarket suggested that people are coming to see the global economic downturn and spiralling debts as the new norm.

The comparison site looked at the impact of the economic climate on the nation's attitude to their finances and found that many consumers are now very pessimistic about when things will get better for them.

Five years ago the collapse of Northern Rock and the subsequent buyout of the ailing mortgage lender led to the first run on a British bank for over 140 years.

It soon became clear that money was being leant to people that would never be in a financial position to pay it back and it saw other institutions follow in its wake including Lloyds TSB and RBS.

This has led to pessimism among consumers in the UK and almost one in five (18 per cent) believe the tough economic conditions will never end, while some 47 per cent think it will be a long time before a sense of normality is restored.

The research also found that 45 per cent of people are concerned with the increasing cost of living, which has squeezed income.

Head of banking at MoneySupermarket Kevin Mountford said the rise in living costs, coupled with the lack of affordable credit, has put more strain on households.

"With the economic outlook continuing to remain uncertain, it is no surprise many consumers are feeling pessimistic about the future, and how they will cope financially," he added.

The expert continued: "Many see the current 'recession' as the new norm, and therefore need to adjust their financial products to reflect this. Whilst for many saving may feel like an impossible task, there are ways to make small cutbacks."

By Paul Thacker