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OP-Pohjola's Consumer Barometer: Finns do not recognise their opportunities for wealth accumulation

October 7, 2013 - London

According to the recent OP-Pohjola Consumer Barometer, over half of the respondents feel that increasing wealth is either fairly difficult or very difficult, while only 11% of the respondents think that increasing wealth is very or fairly easy. The survey conducted in August-September had over 3,000 respondents.

The following statements were at the top when respondents described the reasons why increasing wealth is difficult:
- A large portion of my income goes to housing and other regular expenses
- Basically, I have no assets (nest egg) that I could increase
- I do not know about investment products well enough.

- This is an interesting result. People can begin to save money in very small amounts. Having the skills or the level of returns is not so essential at the outset.  You can seek returns by increasing risk later when you are more knowledgeable and experienced, says Maarit Lindström, an OP-Pohjola Group economist specialising in consumer economics.

- People think it is difficult to increase wealth, although they have now better asset-management opportunities than ever before. This actually poses a challenge for us as a bank to design sufficiently well-defined investment products for customers at the beginning of their career as investors and to create an appealing and encouraging learning path for the years to come. On the basis of the survey results, young people are more fussed about the difficulty of investment than other people, continues Lindström.

Everyday luxury replaces major purchases

The survey showed that Finns feel that their personal financial standing is weaker than last year, on average. This is reflected in the respondents' weaker willingness for home improvement and lower intentions of buying a car or expensive household appliances. The respondents' intention of buying a home has remained somewhat unchanged but they are, however, less confident about finding a suitable home at a suitable price.  In addition, around a third feels that the prevailing uncertainty in the world economy and the Finnish economy has also affected personal finances.

- Many indicators have shown weaker sentiments. But then again, people are planning to travel abroad in the near future to the same extent as before. People are not ready to reduce travelling although destinations and the travel budget may change according to their financial standing, says Lindström.

The importance of travelling in people's minds suggests that Finns are now willing to substitute major purchases for everyday luxury.
The respondents had the chance of describing in open-ended questions what everyday luxury is. In addition to travelling, good food and drink, books, hobbies, friends, physical exercise and peaceful leisure time were highlighted in the responses.

Caution on housing markets

A somewhat pessimistic economic outlook is repeated in responses to question "Do you think it is a good or bad time now to buy a home or sell your present home to buy a new one?" A total of 31% of the respondents think that the time is bad and only 13% think the time is good as against 26% and 21% a year ago. The situation has worsened in recent years. According to Lindström, the period of weaker economic development that originated from the financial crisis has affected home sales with a time lag.

- However, uncertainty felt in the housing market has again highlighted the importance of real property business professionals compared with the situation earlier. During the current year, 65% of home sellers would in the first place like to use an estate agent and 23% would like to sell their home by themselves, explains Lindström. Reliability, transparency and a good and realistic price estimate, in other words expert service on which you can count, are the most important criteria in selecting an estate agent. Low realtor commissions come after these criteria.

The Consumer Barometer was aimed at analysing choices related to personal financial management among Finns and using the received information for the development of OP-Pohjola's services. The last year's barometer showed consumers' greater willingness to purchase buy-to-let homes and need to be financially better prepared for personal injuries. Of the new products and product rejuvenations launched this year, the OP-Rental Yield non-UCITS fund and improvements in personal insurance are specifically aimed at meeting these needs.

OP-Pohjola's Consumer Barometer provides information on values, attitudes, problems and successes associated with financial decisions made by households. Carried out as an online survey in the TNS Gallup Forum panel between 7 August and 4 September 2013, the survey had a total of 3,033 private individuals at the age of 18-69 as respondents.  

For more information, please contact:  
Maarit Lindström, Vice President, Economist, tel. +358 (0)10 252 1695

The research results will be discussed more in the OP-Pohjola Nyt video on 7 October 2013, starting at approximately 2.00 pm at  > OP-Pohjola-ryhmä > Uutishuone

OP-Pohjola Group is Finland's leading financial services group providing a unique range of banking, investment and insurance services. The Group's mission is to promote the sustainable prosperity, well-being and security of its owner-members, customers and operating regions through its local presence. Its objective is to offer the best and most versatile package of loyal customer benefits on the market. OP-Pohjola Group consists of some 200 member cooperative banks and the Group's central institution, OP-Pohjola Group Central Cooperative, with its subsidiaries and closely-related companies, the largest of which is the listed company Pohjola Bank plc.

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Source: Pohjola Pankki Oyj via Thomson Reuters ONE



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