I have been checking the forums to see if anyone had address my concern before I posted this and couldn't find an answer. With the Playstation network being down will this effect our data from being saved, in other words is character progression and other save data such as customization and load outs stored server side or is it local?

I'm pretty sure your character progression data is a gamesave on your HD.
As you can progress the same character offline and online.

Your save file is on your HDD under "Save File Data" or similar on the XMB.

There is, however, also an option for PS+ users to save to cloud saves. Similar to how Steam deals with it (because PS3 and Steam are slowly merging, or rather, creating a link). This would be affected, but still leave you with the first option presented.