Financial wellbeing in November 2024

Summary

• Consumers are feeling less confident about the future UK economy and their future household finances. Over half of consumers (55%) think that the UK economy will get worse over the next 12 months, whilst 16% think it will get better.
• Conversely, consumer confidence in their current household financial situation increased this month, reaching one of the highest levels of confidence in the last two and a half years.
• Financial difficulty remained relatively low this month. The proportion of households missing a payment remained the same as last month (5.7%) and whilst financial adjustments to cover essential spending rose slightly to 50%, it is significantly lower than 2022 and 2023 levels.

You can view more data and articles from our monthly tracker survey on our dedicated Consumer Insight Tracker page.

Consumer confidence in the future UK economy continues to fall

During the first half of this year consumer confidence in the future UK economy rose, reaching 0 in July 2024. Since then, confidence has fallen dramatically, reaching -39 this month (a similar level to this time last year, -37). This score of -39 represents 16% of consumers thinking the future UK economy will get better and over half (55%) thinking it will get worse. 

Consumers’ confidence in their future household financial situation has also declined, dropping three points to a score of -11. Conversely, consumers’ confidence in their current household financial situation increased by six points to +27 this month, representing one of the highest levels of confidence in the last two and a half years.

Consumers’ confidence in the future UK economy has fallen to -39 this month

A majority of those pessimistic about the future UK economy said tax changes were a factor

This month we asked what is driving respondents' sentiment towards the future UK economy and whether the recent Autumn budget impacted this. The data indicates that the actions of the government have a strong bearing on the sentiment of these consumers, although other factors more outside the government’s control also influence consumers’ views. 

Amongst the 55% of consumers who expect the economy to worsen, changes in prices remains the most common reason why consumers think the economy will get worse (69%).

However, the recent change in UK government and tax changes announced in the Autumn budget are also strong drivers of pessimism. 65% of these consumers said that government tax changes were a reason why they think the UK economy will worsen. Many cited the potential impact of rising employer National Insurance contributions on the economy.

“Increases in taxation will lead to job losses, lower productivity and growth” - Female, 65+ year old, North West.

“The budget includes raising tax and national insurance which will hurt the economy an awful lot” - Male, 18 to 25 year old, Yorkshire and Humberside.

“I was disappointed that the richest people and companies were not taxed more, rather than taxing employers which, I think, inevitably be transferred onto employees who will then have less money in their pockets to spend on the high street’’ -  Female, 65+ year old, North East.

This month over half of these consumers cited global events as a driver of their pessimism (55%). This is significantly up from 38% two months ago. The recent US election may have contributed to this.

The reasons why consumers think the UK economy will get worse

Upper income earners are less confident in their future household finances

There was a stark fall in confidence in future household finances among those with household incomes above £41,000 with a 20 point decrease from +18 to -2. This decline in confidence seen amongst upper earners may reflect concerns that the Autumn budget's tax changes will hit higher income households more. By contrast, those with the lowest household incomes (up to £21,000) reported being more confident in their future household finances this month.

Confidence in their future household finances decreased for consumers with an income above £41,000

Financial difficulty measures were relatively similar to last month

The proportion of households missing a housing, bill, loan or credit card payment in the month to November 8th remained relatively low at 5.7%. This missed payment rate has been very volatile in recent months so two straight months of this lower level is very encouraging. The proportion of households reporting missing a payment for a household bill (eg energy or water) was especially low this month at 3.1%, the lowest level since August 2021. 

The proportion of households making at least one adjustment to cover essential spending in the month to November 8th increased slightly from 47% last month to 50%. Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. Despite this small increase, this financial adjustment rate remains significantly lower than levels seen throughout 2022 and 2023.

The missed payment rate stayed consistent at 5.7% in the month to November 8th.

Summary

Measures of financial difficulty are stable and relatively low by recent standards and consumers are generally positive about their current financial situation. However, the headline from this month’s consumer insight tracker is that consumers lack confidence in the future. Three times as many consumers think the UK economy will worsen over the next 12 months than think it will improve and those on higher incomes are most pessimistic about their own future finances. Current government policies and the Autumn budget are contributing to this sentiment, but factors such as prices and global events are also creating pessimism.

Methodology

The fieldwork was conducted by Yonder on behalf of Which between the 8th and 10th of November 2024. A sample of 2,068 UK adults were surveyed online and weighted to be nationally representative.