PricewaterhouseCoopers LLP research shows downturn could impact employee flexible benefits choices

Published at 16:03 PM on 05 December 2008

Despite the ominous outlook, UK consumers will continue to earmark cash for their annual holiday in 2009, says PricewaterhouseCoopers LLP (PwC).

A consumer survey*, launched in April 2008, confirmed consumers ranked holidays and short breaks as the top two spending priorities for 2008. PwC asked the same question in November but looking ahead to 2009. The latest results show that debt repayment (credit cards, loans and overdrafts) has risen to first place (20 per cent) but large holidays come a close second (16 per cent). Buying a car dropped from 6th place to 10th (4 per cent) in the new list of consumer priorities.

Matthew Hunnybun, HR services partner, PricewaterhouseCoopers LLP, commented:

“Falling consumer confidence clearly impacts how individuals spend their money, and this applies as much to the choices they make with their flexible benefits to the decisions they make on the high street. Companies can expect their employees to pay more attention to how they allocate the allowance they are given for their benefits - people may opt increasingly for cash payments where available, rather than selecting the most tax-efficient option.

“The exception to this could be holiday allowances as, while employers might expect staff to buy less annual leave and possibly sell a couple of days back to secure extra cash, this research shows individuals’ appetite for an annual holiday remains. While people may go on fewer mini breaks, the data shows their desire to make home improvements is still strong so companies can expect their employees to take their full holiday allowance but use the days differently.

“As buying a new car becomes less of a priority and second hand vehicles start to look more attractive to those people that really do need to replace their car, employers offering company car schemes will see more employees opting for the cash alternative.”

Malcolm Preston, head of travel, PricewaterhouseCoopers LLP, concluded:

“During the boom era we would expect to see a far higher proportion of people prioritising travel and holidays, so undoubtedly the industry is not immune to the downturn. However, these results show the UK consumer is still set on escaping the recession depression and [aside from paying off unsecured debt] refuse to sacrifice the summer or family holiday.”

ENDS


Notes to Editors:

1. The survey was carried out for PricewaterhouseCoopers LLP by ICM Research. 2. The survey asked “Thinking about the up coming New Year, what do you think will be your top spending priority during 2009? Please select your first choice.” 3. The data is as of November 2008. 4. *Mintel Consumer Poll. 


For more information contact:

Lydia Ruffles
Financial Services, PR Manager, PwC 
Tel:+44 (0)20 7212 1798 
Mobile:07966 319 780 
 

Matthew Hunnybun
Partner, PricewaterhouseCoopers LLP 
Tel:+44 (0)20 7212 6297 
Mobile:+44 (0)7710 611 648 
 

Malcolm Preston
Partner, PricewaterhouseCoopers LLP 
Tel:+44 (0)1293 56 6665 

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