Consumer trust and concern in February 2025

Summary

• Consumers’ trust in businesses improved across most sectors this quarter. Increases in trust were particularly unexpected within the energy and banking sectors, given the recent rise in the energy price cap and the IT outages experienced by banks earlier this year.

• Consumers, especially pensioners, reported an increase in concern about interest on savings. This concern is likely to reflect a reduction in savings rates, and speculation about a reduction in the tax-free allowance for cash ISAS.
  
  
• Consumers' concerns about food prices, housing costs, and energy costs have remained consistently high to three months ago. Rises in the energy price cap, along with rising inflation driven by higher food prices, may be contributing to this continued consumer concern.

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Most sectors saw improvements in trust levels in the last quarter

Over the last quarter, consumers’ trust in businesses to act in their best interest has slightly improved across most sectors. Net trust (% of those who say they trust a sector to act in their best interest minus % of those who don’t trust) in the energy, food and groceries and insurance sectors has returned to levels last seen in August 2024, (to +5, +43 and -16 respectively), following a decline late last year. 

Increasing consumer trust in the energy sector is unexpected as Ofgem recently announced a 6.4% price cap increase set for April.  Although the survey was conducted before this announcement, reports in mid-February had already speculated an increase in the price cap, leading consumers to anticipate the change.

Large increases in trust were particularly seen in banking and social media platforms. Consumer trust in the banking sector increased by seven points to +37, which is the second highest score ever recorded for this sector. This rise in trust is especially surprising given the challenges faced by several banks earlier in the year, including a major IT outage in late January that prevented thousands of Barclays customers from accessing mobile and online banking, as well as another disruption in HSBC's online and mobile banking services on February 11th.

Trust in social media platforms increased by six points reaching -39, matching February 2023 levels, the highest level ever recorded for this sector. Despite this increase, social media remains the least trusted sector, with 55% of consumers distrusting the sector, and only 16% report trusting the sector.

Improvements in trust seen across most sectors

A rising number of consumers, particularly pensioners, are concerned about the interest rate on their savings

This quarter, six in ten (58%) of consumers expressed concern about interest rates on savings, a six-percentage-point increase from the previous quarter. This rise in concern is likely a result of the Bank of England’s recent reduction of the base interest rate from 4.75% to 4.5%, which led to lower savings rates and, in turn, reduced income from savings.

Worries about interest rates on savings may also arise from speculation about the possibility of a  reduction in the tax-free allowance for cash ISAs,. As a result, they consumers would be less able to protect interest income from taxation, further diminishing returns generated from their savings. 

The increase in concern is particularly seen among pensioners. This quarter, almost two-thirds of pensioners (64%) reported being worried about the interest rate on savings, an increase of nine percentage points from November. In comparison, 56% of working age non-parents were worried, and 54% of working age parents. Pensioners are more likely to worry about changes in interest rates on savings, as they generally have more savings and depend on them as their primary income source when compared to their working-age counterparts. Moreover, pensioners (aged 65 and over) make up the largest group of ISA holders, making them particularly vulnerable to reductions in the tax-free allowance for cash ISAs. They would likely be particularly concerned about savings rates if they anticipate that more of their saving interest will now be subject to tax. 

Consumers’ concern for food prices, housing costs and energy costs have remained at similar high levels to three months ago (80% for food prices, 76% for housing costs and 84% for energy). Increases to the energy price cap as well as increases in inflation driven by rising food prices may contribute to this ongoing consumer worry. 

58% of consumers reported being worried about interest rates on savings

Methodology

The fieldwork was conducted by Yonder on behalf of Which between the 17th and 19th of February 2025. A sample of 2,082 UK adults were surveyed online and weighted to be nationally representative.