Consumer confidence and financial wellbeing in October 2022
Summary
- Consumer confidence remains very low - consumers are pessimistic about the future of both their household finances and the wider economy.
- Incidence of financial difficulty remains high, with 8% of households missing a mortgage, rent, bill, loan or credit card payment in the last month.
- Six in ten (60%) households made an adjustment to cover essential spending, matching the high level seen in recent months.
The fieldwork was conducted by Yonder on behalf of Which between 14th and 16th October 2022. A sample of 2,117 consumers was surveyed online and weighted to be nationally representative.
Consumer confidence remains low
Measures of consumer confidence did not change significantly in October, remaining at the low levels seen in September.
Confidence in household finances remains below the worst seen during the Covid-19 pandemic. Just 12% of consumers think their household financial situation will improve over the next 12 months, whilst 58% think it will worsen, giving a net confidence level of -46. Confidence in the future of the economy is even lower, at -63.
People’s confidence in their current household finances, though usually more positive, has been falling and is at +15, with a quarter of consumers describing their household financial situation as poor.
The economic landscape is changing rapidly in the UK, making the timing of the survey crucial to interpreting consumer confidence levels. This month’s survey ran just as the former chancellor was sacked amid economic turmoil. Since then, announcements by the new chancellor have boosted the pound, which may have boosted consumers’ outlook on the economy. However, many may have increased concerns about their household finances following the announcement of the shortening of the energy price freeze to six months rather than the previously announced two years.
Financial difficulty levels remain high
Financial difficulty levels remain high this month, with 8% saying that their household has missed a housing, bill, loan or credit card payment in the last month. Though slightly lower than last month’s 8.9%, this continues the general upward trend observed in recent months, as households grapple with continuing pressure from rising prices. Of those who had missed a household bill (5% of all respondents), energy was the most common, and many had missed more than one household bill.
Six in ten households reported having made 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. This is down from the record high seen last month, but is still much higher than the 44% seen just a year ago. The high adjustment rate demonstrates the continuing pressure households are under as we head into winter, with Christmas and the cold weather likely to increase the need for spending.