Work your membership benefits harder

‘It’s the economy stupid,’ strategist James Carville’s epithet coined in the 1992 Clinton presidential campaign still holds good: in surveys during 2024 it remained way out front as the issue people rated most important.

A quarter of the way into the 21 ^st century, most think the UK economy will stay flat at best which means advice Parliament Hill consistently gives still holds good – it’s a relentlessly dynamic situation: work your benefits package harder, search before you buy, squeeze the maximum possible from every pound you spend. If opinion polls translate to members, then most, whatever their income or wherever they live, think prices will rise faster than incomes. In a busy world with little time to spare, instant gratification, online purchasing and home delivery, you really must tell yourself every time, it is worth taking a deep breath and spending more of your precious time seeking value before you buy.

Seeking value for money everywhere

It is a national trend. Surveys show nearly all consumers put the cost of living at the top of their priorities, seeking greater value for money in food, services and consumer goods, actively moving towards own brands, economy brands and loyalty cards: it’s underlined by the rise and rise of Aldi, Lidl and Poundland although there is less to be had for a £1 these days. Demand for foreign holidays remains inelastic, with travel agents like Hays Travel seeing the market recovering strongly post-pandemic including long haul, but noticeably more holidaymakers are opting for payment in instalments, heading for lower cost resorts, staying all-inclusive, using Air BNB, and often choosing to stay for fewer days.

End of Shrinkflation and Skimpflation?

All consumers hate sneaky shrinkflation and skimpflation – cutting the size or using cheaper ingredients - but eventually these strategies must hit their logical limits where products cannot get any poorer or smaller and must increase in price. It’s a powerful reinforcement of the message that maximising your member benefits in 2025, including access to reliable financial advice, will be critical to sustain your standard of living without recourse to trading down, buying less, or going without.

All consumers hate sneaky shrinkflation and skimpflation – cutting the size or using cheaper ingredients - but eventually these strategies must hit their logical limits where products cannot get any poorer or smaller and must increase in price. It’s a powerful reinforcement of the message that maximising your member benefits in 2025, including access to reliable financial advice, will be critical to sustain your standard of living without recourse to trading down, buying less, or going without.

Winners and Losers

The UK General Election produced a landslide victory with a mandate for change, but first steps were faltering, and Larry the Cat remains more popular than any of the transient occupants of No10 Downing Street. A declared push for growth was offset by headlines on black holes in the public purse, cuts in benefits like the winter fuel allowance and increases in taxes and national insurance. This will hit many members, some may face rises in inheritance tax or VAT on independent schools, many more will experience the continuing freeze in income tax bands until 2028 and higher interest rates when fixed-term mortgages come to an end. There is particularly brutal news for any sector that relies on discretionary spend. Sad to report over 1400 restaurants, 13,500 retail shops and 412 pubs closed in 2024 and the prospects for 2025 are tough.

It is not all gloom - more public money and governmental effort will stimulate sectors that many members work in especially health, education, housing, and infrastructure. Above inflation public sector pay rises plus increases in national minimum wage and living wage will put more spending power in many members’ pockets.

Global predictions

The UK may be an island, but is also part of a global village. The cost of living, health, education and housing are top of any list, but people in all countries say they value stability & security very highly - never easy to achieve - with the prospect of a new Trump administration seeking radical social and economic reform and the terrible wars in the Middle East, Ukraine, and Africa.

The annual survey by IPSOS MORI of 33 countries shows people are slightly more optimistic that 2025 will be better than 2024 with about half believing “the global economy will be stronger next year than it was this year”. Other issues rated important globally which Parliament Hill will continue to track closely in 2025 include the environment, where most agree average global temperatures will increase in 2025, and health and wellbeing: half of those polled believe a new pandemic could occur during the year. Finally, information technology is the fastest changing area where a clear majority say, “Artificial Intelligence will lead to many jobs being lost in my country.” AI is definitely the one to watch in 2025.

Mark Pegg grew up and was educated in Derby and at Oxford University. He has been a Chief Executive and Company Director and is currently a Governor of two schools. He is a Companion of the Chartered Management Institute and Fellow of the Chartered Institute of Personnel and Development.