INTRODUCTION

The UK Wealth Watch from Lloyds TSB Private Banking gives a fascinating insight into wealth in Britain today. Comparing and contrasting the attitudes of the rich towards shopping with those of the general public, the report assesses UK purchasing behaviour and investigates whether getting a bargain is as much of a priority for those with a lot of money as for the general population.

Two pieces of research were conducted in August 2003. The first survey1 questioned high net worth individuals (those with £250,000 or more in liquid assets and/or an annual salary of £100,000 or more) and the second questioned the general public. The surveys investigated the shopping habits and attitudes of both groups of people with the aim of providing a unique insight into the similarities and differences that exist between the UK’s rich and the average Brit.

Executive Summary
  • It is often assumed that the rich buy whatever they want, whenever they want. However, the UK Wealth Watch has found that they use money-saving tactics just as much as the average Brit.
  • The rich are more likely to haggle or negotiate over the price of a purchase than the general population.
  • The savings made by using a loyalty card are also recognised and appreciated by the rich more than the population as a whole. Seventy per cent of the rich said they used a loyalty card to gain rewards when shopping, compared to just over half (52 per cent) of the general public.
  • It is often taken for granted that the rich have surplus cash at their disposal and therefore are more likely to impulse buy. In fact the reverse is true with only 16 per cent of the rich saying that they would buy on the spur of the moment on a regular basis, compared to 43 per cent who claim that they still carefully research all their purchases before handing over their money.
  • The UK’s rich are bargain hunters at heart and don’t fritter their money away. Finding a good deal is all part of the shopping experience for many people despite how much money they have. Both the rich and general population take the time to research a purchase before buying in order to get a good deal.
  • Rich men are far more likely to research their purchases than rich women, with over half stating they carefully researched before buying, compared to just under a quarter of their female counterparts.
  • The shopping trends of men and women amongst the general population appear to be in stark contrast to those of their wealthy counterparts. Contrary to popular belief, it is the average British man who is more likely to impulse buy than the woman.

SHOPPING HABITS OF THE UK’S RICH

Are the rich thrifty shoppers?

It is often assumed that the rich have the money to buy whatever they want, whenever they want, but UK ‘Wealth Watch’ has explored how canny they are and the ways in which they use money saving tactics, comparing this to the average Brit.

The results are intriguing. Not only do the rich, on the whole, employ thrifty tactics just as much as anyone, but in some ways they look even further for a good deal.


The most fascinating insight from the UK Wealth Watch research is that the rich are much more likely to haggle or negotiate over the price of a purchase than the average Brit. Despite their wealth, over half (53%) of those rich people questioned said that they haggled or negotiated on price compared to only a third of the general population.

Martin Lloyd-Elliott, consumer psychologist, comments: “The rich often feel more knowledgeable about business and profit margins, and thus feel more confident to haggle, trusting the seller will be prepared to take their cash rather than lose the sale to another competitor.”

The savings made by using a loyalty card are also recognised and appreciated by the rich more than the population as a whole. Seventy per cent of the rich said they used a loyalty card to gain rewards when shopping, compared to just over half (52 per cent) of the general public.



Martin Lloyd-Elliott, consumer psychologist, explains: “The rich tend to expect special treatment. They look for added value in most things and enjoy the trappings and extras that are provided by loyalty schemes.”

Shopping around for a good deal is a key way of saving money whatever the level of wealth, according to UK Wealth Watch. Despite the time it takes to research a purchase to make sure it is being brought for the best price, four out of five (80 per cent) of the rich surveyed said that they spent the time to do this. This is on a par with the population as a whole, as 82 per cent of average Brits claimed that they shopped around to get a good deal.

Although there are some tactics for saving money that are employed by a greater proportion of the general public than admitted by the rich, the numbers of rich people using these methods it still surprisingly high. Nearly nine out of 10 of the population at large claims to look for bargains such as ‘buy one get one free’ as a way of making savings when shopping, but a large majority of the rich also take advantage of these benefits. Almost three-quarters (72 per cent) of the UK’s rich stated they use, ‘buy one get one free’ offers when shopping.

These figures show that despite their wealth, the UK’s rich are still bargain hunters at heart and don’t fritter their money away in the shops. Finding a good deal is all part of the shopping experience for many people, despite how much money they may have.

Men vs Women

It isn’t just the differences between the rich and the average Brit, in terms of trying to save money when shopping, which provide interesting results from the UK Wealth Watch report. The differences between the sexes, whatever their level of wealth, are also fascinating. Men and women clearly favour different thrift tactics when out shopping.


Overall men are more likely to haggle or negotiate over price – which begs the question, are they more confident? Or are they just more prepared to enter into confrontation with a seller?

The staggering fact highlighted by the UK Wealth Watch research is that nearly two thirds (64 per cent) of rich men say they haggle or negotiate to save money when shopping. This is way ahead of the average British male – just over 40 per cent of whom said they’d employ this tactic. Rich men are also twice as likely as rich women to haggle to get a better deal, with only 30 per cent of women saying they’d do this.

This is in stark contrast to the average British woman, only a quarter of whom are prepared to negotiate over price.

Martin Lloyd-Elliott, consumer psychologist, says: “While haggling may seem confrontational, rich men typically are unafraid of confrontation and will not shy away from a show down over the cost of something if they feel it is unreasonable.”


Loyalty cards, as this report has already established, are particularly popular with the UK’s rich. It is rich women however who are the most frequent users of this form of thrift. Eight out of 10 rich women claim they use loyalty cards when shopping compared to only just over half (53 per cent) of the general female population. Rich men, although not as keen on the card carrying as their female counterparts, are still ahead of the average British male in this type of money saving. Nearly two thirds (64 per cent) of rich men stated they use loyalty cards when shopping, compared to just over half (51 per cent) of the general male population.


In general, women are more likely to look for special deals such as ‘buy one get one free’ whether they are rich or part of the population as a whole. The most frequent users of these sorts of deals are women in the general public, (92 per cent). The average British man isn’t far behind with 86 per cent of them also admitting to using these sorts of offers, which is on a par with rich women – 85 per cent of whom said they use this tactic when shopping. Although, by comparison, rich men may seem less committed to this type of money saving, a significant two thirds (66 per cent) of them still say that they’d use this method of saving money.


For men, having a good look around at what’s available is the key to getting a good deal when out shopping. UK Wealth Watch shows that being rich does not seem to make a difference as to whether a man is prepared to spend the time shopping around for the best deal. Nearly four out of five (87 per cent) rich men and 85 per cent of average British males said that they liked to shop around before making a purchase. Rich women may be the least likely to be prepared to shop around but over two thirds of them (67 per cent) would still make the effort to make sure they were getting a better deal than they could get elsewhere.

Martin Lloyd-Elliott, consumer psychologist, explains: “The rich are usually either concerned about making even more money or preserving what they already have. Thus they excel at researching high value purchases carefully.”

SHOPPING PERSONALITIES

Do the rich carefully research before they buy something, so they get the item they want at the best price, or does their wealth mean that they are always able to impulse shop - buying what they want, when they want?

UK Wealth Watch investigated this by researching how both the rich and the UK’s general population shopped when they bought non-essential goods costing more than £100.



It could be taken for granted that the rich would have the surplus cash to impulse buy frequently. However, fascinatingly, only 16 per cent of the rich said that they would buy on the spur of the moment on a regular basis, compared to 43 per cent who claim that they still carefully research all their purchases before handing over their money. A large proportion of them, therefore, don’t just ‘flash the cash’ when something catches their eye. Forty one per cent, however, do admit to impulse buying occasionally - a benefit they have from having the money to spare.

Despite their hesitation when it comes to impulse buying, it is not surprising that their tendency to do this is still greater than the average Brit. The general population are half as likely to frequently (8 per cent) or occasionally (21 per cent) impulse buy than their rich counterparts and over two thirds (67 per cent) of them said that they carefully research their purchases.

Battle of the sexes


It is a well-known assumption that most women love to shop and rich women appear to be no exception. Despite the fact that the research shows that rich people don’t impulse buy as much as could be assumed, it is rich women that appear to be the main impulse buyers in the UK. The research found that in fact rich women are twice as likely to buy on the spur of the moment on a regular basis than rich men. Nearly a quarter of rich women (24 per cent) admitted to doing this compared to only 12 per cent of rich men.


Again, although just over a third of rich men admit they sometimes impulse buy (36 per cent), rich women are far more likely to do this with over half (52 per cent) of them saying that they shopped this way.

Conversely, and perhaps unsurprisingly, rich men are far more likely to research their purchases than rich women, with over half (52 per cent) stating they carefully researched before buying, compared to just under a quarter (24 per cent) of their female counterparts.


In stark contrast, the shopping trends amongst the general population, men and women appear to shop very differently to their wealthy counterparts.

Contrary to popular belief, it is the average British man who is more likely to impulse buy. Nearly a quarter (23 per cent) said they occasionally shopped on impulse, compared to 18 per cent of women, with only 1 in 10 men (12 per cent) regularly impulse buying compared to only 7 per cent of average British women.


Unlike rich women, who have a tendency to impulse buy more regularly, the majority of women in the general public prefer to carefully research their purchases over £100. A massive 7 out of 10 said they would research before buying. The average UK male is slightly less conscientious, with just under two thirds (65 per cent) of them claiming to research before buying.


CONCLUSION

The UK Wealth Watch report clearly shows that rich Brits are just as likely to take advantage of money-saving tactics as the average Brit. Indeed, the rich are more likely to haggle over prices and are even more likely to whip out a loyalty card at the checkout than the average shopper.

Whilst it is often taken for granted that the rich have surplus cash at their disposal and therefore are more likely to impulse buy, in fact the reverse is true. Far from being spendthrifts, these prudent purchasers are likely to research their purchases carefully before parting with their cash.

ABOUT LLOYDS TSB PRIVATE BANKING

Lloyds TSB Private Banking Ltd (LTPB) provides wealthy individuals with a comprehensive range of specialist services tailored to their investment and financial needs.

Part of the Lloyds TSB Group, the company can draw on the integrity, strength, security and expertise of a major banking network. However, as an independent financial adviser, it is free to consider all the investment opportunities currently on offer to best suit individuals’ needs.

LTPB is one of the largest providers of private banking services in the UK. The company manages or administers funds of more than £9 billion for around 35,000 clients from its network of 30 offices throughout the UK. LTPB initiates an average of 1200 Stock Exchange transactions a day on behalf of its clients. During periods of high market activity, this figure can double.

Banking Service

The Private Banking Premier Service is a premium banking service designed especially for Private Banking clients. It offers first class service from both the Private Banking relationship manager as well as banking experts at a dedicated service centre, which is available 24 hours a day, 7 days a week.

The Private Banking Premier Current and Investment Accounts offer the attractive rates and the current account offers a range of added value benefits, such as the Premier Travel Service, which includes annual travel insurance

Asset Management Service

The Asset Management service is available to clients with more than £250,000 in cash and/or marketable assets. Each client is allocated a private banking manager who is responsible for the day-to-day management of the client’s financial affairs.

Other specialist services

As part of the Lloyds TSB Private Banking’s integrated approach to asset management, clients can also benefit from expert advice on tax return completion and tax planning, will writing, estate planning and estate administration, trust administration and wider financial planning issues, such as school fees, retirement planning, long term care and insurance. They can also advise on other tax efficient investments such as enterprise investment schemes, venture capital trusts, enterprise zone trusts, oil and gas partnerships, forestry and fine wines.

1 Continental Researchinterviewed the high net worth by telephone between 12 – 19 August 2003.

ICM Research interviewed a random selection of 1001 adults aged 18+ by telephone between 15 – 17 August 2003. Interviews were conducted across the country and the results have been weighted to the profile of all adults.

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