How will ordinary households fare in the economic turbulence of 2012?

MOTORING

Drivers faced soaring prices at the pumps in 2011, with the cost of unleaded petrol reaching a record 137.43p a litre in May. The cost of filling up has dropped since and, amid an outcry of protest, Chancellor George Osborne cancelled a planned 3p rise on tax paid on unleaded petrol and diesel. It was due to come into effect today.

But AA spokesman Luke Bosdet said the motoring organisation would publish research this week showing a "significant number" of drivers intend further reducing their car use in the coming year, with many still struggling to afford the cost of fuel, now averaging 132.71p for petrol.

He said: "The fear is that when even the slightest green shoots [of recovery] start to appear you will have people running around saying the era of cheap oil has ended, demand will be greater than supply, the price of oil will be going up and you need to buy now – and that then sends the price soaring.

"Alternatively, we might have a little bit of a problem in the Middle East ... you can always look to a little global tension just to push the price up as well.

"The only counter is that it is a case of 'be careful what you wish for'. If the price of oil drops spectacularly the chances are the reason for that is because the euro has collapsed or some other global economic activity has gone badly wrong. So it is a balancing act."

He added motorists would benefit if the pound improved in value against the dollar, getting "more fuel for their buck".

THE HIGH STREET

SHOPPERS enjoyed bargains galore over the festive period as nervous retailers slashed prices in an attempt to entice customers to part with their cash. There was a slow start to the sales on Boxing Day, but Scots were reportedly out in force last Tuesday, splashing out £210 million on what was thought to be one of the busiest shopping days of 2011.

In Aberdeen, the Union Square shopping centre said it had seen a 12.5% increase in the number of people on the streets during December compared to the year before.

But the past week has also seen fresh casualties on the high street, with Scottish store chain D2 Jeans becoming the first notable post-Christmas casualty when it went into administration on Thursday.

A day later, the owner of Hawkin's Bazaar collapsed into administration, while about 1600 jobs across the UK are to go at shoe retailer Barratts Priceless after attempts to find a buyer for the business failed.

There are fears more chains could fold in coming weeks, with lingerie chain La Senza expected to appoint administrators and speculation Blacks Leisure will meet a similar end after it put itself up for sale.

Sarah Cordey, spokeswoman for the Scottish Retail Consortium, said the industry was still in a "critical period" with spending yet to be analysed.

"We saw a good level of business for the start of the Boxing Day sales, which is great, but you have to bear in mind the prices are incredibly low because of all the discounting that happened pre-Christmas, so the post-Christmas sales have been even bigger," she said.

"There are plenty of people around but in terms of money going through the tills it may not be very much as the level of discounting is so high."

COUNCIL TAX

One area where householders can breathe a sigh of relief is council tax, with a freeze on the bill continuing throughout Scotland next year.

The move was confirmed by Finance Secretary John Swinney last week after all 32 local authorities agreed to the Scottish Government's funding package. Councils had been told to either accept the deal or face a 5.2% cut in their funding. The Government claims the freeze on council tax, which has been in place since 2007, will have added up to £500 saving to the average taxpayer by the end of the next financial year.

However, opposition parties have questioned plans to freeze council tax for the five-year duration of the Parliament amid fears it is unaffordable and will cost jobs.

TRAVEL

The Association of British Travel Agents has predicted budget and luxury holidays will be most in demand in 2012, with the mid-market likely to come under the greatest pressure from squeezed household budgets. Baby boomers are expected to be among those most likely to take a trip, with research showing 10% of over-55s took more than four foreign holidays in 2011.

Bob Atkinson, of the website travelsupermarket.com, said a survey had found more people are intending on taking a break in 2012 than in 2011. And while the major tour operators had trimmed some capacity in expectation of reduced demand, he said bargains would still be available.

"Many people did cut back in 2011, but they told us they would definitely be looking to take a break in 2012," he said. "They may concentrate their holidays into having one main break, but they are determined to get away."

Passengers will face some additional costs with an increase in air passenger duty from April, which will rise from £12 to £13 per person for trips to Europe and from £60 to £65 for destinations such as Florida.

Atkinson said travellers were still likely to pick up bargains outside of school holidays, with short-haul destinations such as Spain, Portugal, Greece and France continuing to be popular.

He also suggested Scottish holidaymakers could try flying from airports south of the Border for cheap deals during June's European football championships, which Scotland has failed to qualify for.

"The longer England stays in (the competition), the longer prices out of places like Newcastle and Manchester will be suppressed," he said.

UNEMPLOYMENT

THE latest official figures show unemployment in Scotland rose by 25,000 to 229,000 between August and October, with the rate now 8.5% compared to the UK figure of 8.3%.

Recent studies have also suggested that long-term unemployment is rising faster in Scotland than in any other part of the UK and women are losing jobs at a faster rate than men. Office for National Statistics research found 15.8% more women are claiming benefits, compared to just a 1% increase for men over the last year.

Experts predict a gloomy outlook, with warnings from the Chartered Institute of Personnel and Development last week that the job market faces its toughest year for a generation. It has predicted UK unemployment will reach 2.85 million by the end of 2012 – compared to the current 2.6 million – and will not fall below 2.5 million before the middle of the decade due to slow economic growth.

HOUSING

There have been mixed reports on Scotland's housing market in recent weeks, with figures suggesting properties are holding their value better than homes in the rest of the UK – but at the same time the number of first-time buyers has fallen to a 35-year low.

Martin Ellis, housing economist at Bank Of Scotland, said its latest report showed prices in the third quarter of 2011 were down 1.5% against the previous year.

But he added: "The feature for 2011 has been that it has been better than expected in some ways, in so far as we have not seen big changes. It has just been a little drift down in terms of prices reflecting very difficult economic conditions and the fact the outlook has seemingly worsened in recent months.

"We are expecting more of the same in 2012. For the UK overall we are talking about broad stability, but it could be in the range of minus 2% to plus 2%.

"We would probably put Scotland nearer the bottom of that range, so it might be slightly negative. But the big caveat around that is there is clearly a lot of uncertainty, which makes it even more difficult to predict than normal because of what is happening in terms of the eurozone, the global economy and how that all pans out.

"Those are the real uncertainties. Were we to get a situation where events were to worsen in the eurozone then that would clearly have a negative impact on the housing market here."

It is widely predicted UK interest rates will remain at 0.5% throughout 2012. However, from March a temporary exemption from 1% stamp duty for first-time buyers on properties costing under £250,000 comes to an end.

ENERGY

A fresh set of price rises was announced by the big six energy firms in the UK over the summer months in 2011. The companies blamed rising wholesale costs for the increase, while consumer bodies warned it left millions of householders facing cutting back on other essentials to heat their homes this winter. The impact of the price rises will now be felt as bills based on the increased prices start to drop through the door from now to March.

Tom Lyon, energy expert at the price comparison website uSwitch.com, said the rise equated to an £224 increase in the cost of energy for an average household over a year. However, he said there was little to indicate householders would face further increases in energy bills in the coming year.

"We are not seeing anything that will suggest prices will go up, if anything the wholesale price has come down a bit," he said. "If it continues to go down and stays down and suppliers believe it is going to stay down for a sustained period of time, we may see bills come down a little bit, although I think it is unlikely."

However, he cautioned there had also been little to suggest price rises on the way at the beginning of 2011, but world events such as the tsunami in Japan and uprising in Libya subsequently had an impact.

Lyon added: "The good news is prices may not go up any further, but they are unlikely to come down and are still the highest prices we have seen for some time.

"It is still going to be very tough because it is not the only thing that is putting pressure on family's purses at the moment."

PAY RISES

STAYING in employment will be the main goal for workers in 2012 as staff struggle to keep jobs, with experts warning of "tough times coming".

Both public and private sector workers will see their pay remain static with some even suffering slight reductions in wages, according to experts.

As the UK tries to cope with austerity measures to deal with the economic crisis and the country's high debt, Scotland is following suit and freezing most public sector pay.

Earlier this week the Scottish Government announced it would freeze the pay of councillors for a third year running, despite recommendations to raise it by nearly one fifth.

Similarly, the private sector will struggle with the service industry beginning to feel the pinch and tourism in Scotland threatened by the euro crisis.

However, there is good news for people working in the energy sector in the north of Scotland as the industry remains robust.

David Watt, executive director of the Institute of Directors, said: "There will be very small, if any, pay rises for 90% of people in the private sector in 2012 and there may even be small wage cuts for some people.

"Tourism will be hit as the recession bites in Europe, which could be a disaster for Scotland.

"There are tough times coming. People will be hoping to retain their jobs, more so than worrying about pay rises."

DEBT

WITH pressure on incomes and rising unemployment, personal debt is an increasing problem for many. Provisional figures from Citizens Advice Scotland (CAS) for 2010-11 showed a 6% increase in debt cases, equivalent of 400 extra cases for every day of the year. Among the most common problems reported were difficulties with council tax arrears or mortgages, while many older people had run into problems trying to heat their home. Latest available figures published in November showed that the number of Scots going bankrupt is rising, despite figures showing bankruptcies levels falling across the rest of the UK. A total of 5378 Scots went bankrupt between July and September this year, up 3.9% compared to the same period the previous year. In contrast, England saw a drop of 11%. Meanwhile, it has been predicted the number of people losing their homes for failing to keep up mortgage payments will rise across the UK in 2012. Last month The Council of Mortgage Lenders said it expected 45,000 repossessions will happen in 2012, up from 37,000 in 2011, with rising unemployment counteracting any beneficial effect of continuing low interest rates.

INCOME AND PRICES

The average family is already £15 a week worse off than a year ago, according to the figures from the Centre for Economics and Business Research.

They show the typical family's disposable income is £161 a week, down 8.4% on this time last year, while the costs of running a family home are to rise, despite an improvement on food and clothing costs.

In October, gas prices were 25.3% higher than a year ago, while electricity rose 15.5%.

However, the centre's figures also say the amount of disposable income available to families will stabilise in the first few months of 2012 as inflation slows, but it is expected people will save rather than spend. However, wage freezes and shaky employment conditions could damage spending power.

Rail fares, calculated against inflation, go up 6% tomorrow.

Prices for goods are rising at their fastest rate for years, with the Retail Prices Index at 5.2% in November. Research firm Verdict also predicts further struggles for retailers as Britons cut £1 billion from buying extras, such as books, electrical gadgets and furniture.

The firm predicts retail sales will increase by £3.5bn, or 1.2%, to £295.3bn in 2012, which would be the third-weakest result of the last four decades. By the end of 2012 spending on clothing and household goods will have declined by nearly £10bn since 2007.

People are expected to eat at home more, with food sales expected to rise by more than 3%, while household goods and home entertainment products are expected to fall by more than £900m and £500m respectively.

AND FINALLY - SOME GOOD NEWS

One ray of hope is the Scottish whisky industry, which saw exports increase to nearly £3 billion in the nine months to September, up 23% on the same time last year. Whisky's increasing popularity in new markets such as Asia is helping to fuel a boom in the industry, which sustains more than 10,000 jobs in Scotland.