Financial Wellbeing in December 2024
In this article
- Summary
- Consumer confidence worsens
- The missed payment rate has increased, particularly the rate of missed household bills
- Increases in the missed payment rate were particularly felt by working age parents
- Over half of homeowners had to make at least one adjustment to cover essential expenses, the highest rate since the start of the year
- Summary
- Methodology
Summary
- Consumer confidence has worsened in the month to December 11th. Most notably, confidence in consumers’ current household finances has declined to +19.
- The proportion of households missing a payment has risen sharply to 7.9%. Particularly, missed household bill payments have increased after three months of continuous decline.
- Increases in missed payments were seen across all demographics, however, the largest increases in missed payments were most prominently seen amongst working age parents.
- More than half of households (55%) have had to make at least one adjustment to cover essential spending, the largest proportion since January 2024. This increase in the financial adjustment rate is unusual, as December has historically seen a decline, with financial challenges typically easing during this period.
- Two-thirds (66%) of households earning up to £21,000 made at least one adjustment to manage essential expenses, and the rise in these households dipping into savings suggests that Christmas spending may be a contributing factor.
Consumer confidence worsens
Consumers reported feeling less confident about their household finances in the month to December 11th. Decreases in confidence were largest in consumer’s current financial situation dropping to a score of +19, which was an eight percentage point decrease on the previous month. This score represents two in five (41%) consumers believing their current household finance situation is good and one in five believing it is poor (22%).
People’s confidence in their future household financial situation decreased to -14 (a three percentage point decrease). Confidence in the future UK economy remained similar to last month at -40 (a one percentage point decrease), but this follows a fall last month.
Consumer confidence in their current household finances declined to a score of +19
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave.
The missed payment rate has increased, particularly the rate of missed household bills
This period saw an increase in the proportion of households missing a housing, bill, loan or credit card payment by 2.2 percentage points to 7.9%. When looking closer at the type of missed payment, the proportion of households reporting missing a payment for a household bill (e.g. energy or water) increased this month to 5%. This increase follows three months of continuous decline in this type of missed payment.
The missed payment rate rose to 7.9%, and the missed payment rate for household bills rose to 5%
Source: Which? Consumer Insight Tracker: Approximately 2,000 respondents per wave. UK level data are weighted to represent the adult population of the UK by age, gender, region, social grade, working status and housing tenure.
The rise in financial difficulties among households this December is unusual. Historically, missed payment rates tend to decrease this month. However, this year’s missed payment rate stands at 7.9%, higher than the 6.5% recorded in December 2023, 6.7% in December 2022, 6.1% in December 2021, and 6.3% in December 2020.
Increases in the missed payment rate were particularly felt by working age parents
The missed payment rate has increased across all demographic groups, showing that this element of financial difficulty has worsened across the board. However, the increase was most prominent amongst working age parents. In November one in ten (9.5%) of working age parents missed a payment compared to one in seven (13.7%) this month, an increase of 4.2 percentage points. In comparison, 7.8% of working age non-parents missed a payment (an increase of 1.8 percentage points) and 1.2% of pensioners missed a payment (an increase of 0.8 percentage points).
One in seven working age parents missed a payment in the month to December 11th
Source: Which? Consumer Insight Tracker: Data for demographic groups are unweighted and samples vary between waves. Typical sample sizes per wave range from 520-580 for working age parents, 980-1,050 for working age non-parents and 470-540 for pensioners (based on middle quartiles).
Over half of homeowners had to make at least one adjustment to cover essential expenses, the highest rate since the start of the year
In the month to December 11th, the proportion of households making at least one adjustment to manage essential spending rose from 50% to 55%. Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. This represents the highest rate of financial adjustment since the beginning of this year (January 2024).
More than half (55%) of consumers had to make at least one adjustment to cover essential spending
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.
Two thirds (66%) of households with an income of up to £21,000 had to make at least one adjustment to cover essential spending. This is the highest financial adjustment rate seen by this group since June 2023 and represents an 8 percentage point increase since last month.
In contrast, 55% of consumers with an income between £21,001 and £41,000 made at least one adjustment to cover essential spending (a 3 percentage point increase since last month) and 48% of consumers with an income above £41,000 (a 2 percentage point increase since last month).
Looking more closely at the types of adjustments homeowners with an income of up to £21,000 had to make, a third (34%) dipped into savings, a 10 percentage point increase from last month. This was possibly due to the need to manage the rise in spending during the weeks leading up to Christmas.
66% of households with an income up to £21,000 had to make at least one adjustment to cover essential spending on the month to December 11th
Source: Which? Consumer Insight Tracker: Data for demographic groups are unweighted and samples vary between waves. Typical sample sizes per wave range from 637-785 for up to £21k, 760-869 for £21k - £41k and 315-458 for above £41k (based on middle quartiles).
Summary
This month’s tracker survey indicates that there is a deterioration in consumer confidence, specifically when it comes to current household finances. The lack of confidence suggests consumers are facing financial challenges and this can be seen by how more households have missed a payment this month compared to November and over half (55%) have had to make at least one change to their spending to manage essential costs. Historically, financial difficulties tend to ease at this time of year, but this trend is not evident this December. The missed payment rate has risen across all demographics, reflecting widespread financial strain. Low-income households are especially affected, with two-thirds of those earning up to £21,000 having to make at least one adjustment to cover essential spending.
Methodology
The fieldwork was conducted by Yonder on behalf of Which between the 11th and 13th of December 2024. A sample of 2,073 UK adults were surveyed online and weighted to be nationally representative.