Financial wellbeing and consumer confidence in December 2022

Summary

• The proportion of households who had missed a housing, bill, loan or credit card payment in the last month was at 6.7% in December. This is lower than seen in recent months, though we have historically observed lower financial difficulty rates in December and it was 6.1% in December 2021.
• The proportion making adjustments to cover essential spending remained stable, at 56% of households.
• Consumer confidence remains at similarly low levels to those seen in November.

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Financial difficulty levels remain high

The proportion of households who had missed a housing, bill, loan or credit card payment in the last month was at 6.7% in December. This is a drop from the 7.9% seen last month. However, financial difficulty levels are frequently lower in the lead up to Christmas (according to our tracker data). Last December, the missed payment rate was 6.1% but increased to 9.1% in the new year. 

Renters were more likely to miss a housing payment, at 6.4%, than were homeowners (2.5%). 3.1% reported having missed a loan or credit card payment and 4.6% reported having missed a bill payment. The most common type of bill missed was energy, at 2.3% of households, followed by council tax (1.9%), phone (1.6%) and broadband (1.4%). 

Just under six in ten (56%) 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 a significant increase on the 42% seen this time last year, but lower than the 65% peak seen in September of this year.

 Consumer confidence remains very low

Consumer confidence remained at very similar levels to last month. Confidence in the future of the economy dropped slightly, though not significantly. Just 10% of consumers think that the economy will get better over the next 12 months, whilst 72% think it will get worse, giving a net confidence level of -62. This compares to -54 last month. Confidence in the current economy and current household finances remained exactly the same as last month. Confidence had improved slightly in October and November, but that improvement appears to have halted in December.