Financial wellbeing in the September 2023 tracker
Summary
- There are signs that the economic environment is improving for consumers. Consumer confidence continues to recover, with confidence in the future UK economy reaching an 18-month high
- This coincides with the proportion of households making an adjustment to cover essential spending, such as cutting back on essentials, dipping into savings or borrowing, falling to its lowest level in 18 months at 53%
- However, many households continue to experience financial problems. The rate of households missing a mortgage, rent, bill, loan or credit card payment in the last month remained high at 8.2%
- With the return to school this month, households with children are most likely to be experiencing financial difficulties. 15% of these households said they’d missed a payment in the past month
Consumer confidence is returning
Measures of consumer confidence improved for the second straight month in the month to September 8th.
Consumers’ level of confidence in the UK economy recovered in the last month, although a larger number of consumers remain pessimistic than optimistic. Almost a quarter of consumers (23%) said they think the UK economy will get better over the next 12 months, whilst half (50%) said they think it will get worse, giving a net confidence of -27. This is the highest level of confidence observed since March 2022.
Consumers’ rating of their current financial situation also increased this month, up to a net score of +21.
Consumer confidence recovered in the month to September 8th
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave.
Financial adjustments falls while missed payment levels remain high
A positive trend observed this month was a drop in the proportion of households making at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. The proportion of households reporting at least one adjustment fell to 53% this month, the lowest level observed in 18 months. Despite this fall, many more households are still experiencing financial hardship compared to 2020 and 2021, when adjustment levels consistently ranged between 35% to 46%.
Over half of households made at least one adjustment to cover essential spending in the last month
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. Adjustments include: cutting back, dipping into savings, borrowing from friends and family, taking out credit cards or loans, selling items, using an overdraft.
However, many households continue to experience financial problems. Our more severe indicator of financial difficulty, the rate of missed payments, remained high this month with 8.2% of households missing a housing, bill, loan or credit card payment in the past month.
8.2% of households said they had missed a payment in the month to September 8th
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. The chart shows the proportion of households who have missed a housing, bill, loan or credit card payment in the last month.
Back to school and financial difficulty
With the return to school this month, households with children surveyed struggled the most to meet their payments with over 1 in 7 (15%) missing at least one payment in the past month. This rate was significantly higher than households without children (5%).
Over 1 in 7 households with children report missing at least one payment in the past month
Source: Which? Consumer Insight Tracker, Online Poll conducted from 8th-10th September 2023 with 2,070 consumers. The sample is weighted to be nationally representative. Base sizes for household types are as follows: households with children (645), households without children (1,425).
Again, households with children were more likely to be making adjustments to cover essential spending, compared to households without children. Almost 7 in 10 (68%) of households with children reported at least one adjustment this month, significantly higher than households without children (46%).
Almost 7 in 10 households with children made at least one adjustment to cover essential spending in the last month
Source: Which? Consumer Insight Tracker, Online Poll conducted from 8th-10th September 2023 with 2,070 consumers. The sample is weighted to be nationally representative. Base sizes for household types are as follows: households with children (645), households without children (1,425)
Summary
This month's insights suggests the financial outlook for consumers may be brightening, following a steep decline two months ago. However, figures on current household financial difficulty suggest that, while some households might be seeing improvements to their household financial situation, many remain at serious risk of financial hardship. This is especially true for households with children who may have struggled financially to cover the essential back to school supplies.
Methodology
The fieldwork was conducted by Yonder on behalf of Which between 8th and 10th September 2023. A sample of 2,070 consumers was surveyed online and weighted to be nationally representative.