Financial wellbeing in March 2024

Summary

• Levels of financial difficulty increased this month, with the proportion of households missing a housing, bill, loan or credit card payment standing at 8.6% in the month to March 8th
• The missed payment rate was especially high for renters (14%) and mortgage holders (8.1%), the latter being one of the highest levels we have ever recorded for mortgage holders
• Consumers’ outlook on their own financial situation fell slightly this month with confidence in their current household situation decreasing 3 points and confidence in their future situation decreasing by 5 points
• While some consumers referenced the recent spring Budget (or economic policies soon to come into effect from the autumn Budget) in their reasons for why they think their household situation will improve or worsen over the next 12 months, the vast majority of consumers cited other factors in their lives such as pay rises or difficulties grappling with continuously rising prices

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

Missed payments rates return to high levels

The proportion of households that missed a payment rose in the month to March 8th, with 8.6% of households reporting that they missed a housing, bill, credit card or loan payment. This level of missed payment is slightly lower than this time last year (8.8% in March 2023) but higher than the 2023 average of 7.9%, showing that the cost of living is continuing to impact many households' ability to pay their essential bills. 

8.6% of households said they had missed a payment in the month to March 8th

This increase in missed payments was not felt equally across all groups of consumers, and varied substantially by housing tenure. Outright homeowners, who have always had the lowest missed payment rate, actually saw a decrease in missed payments to 1.6%, down from 2.8% in February. In contrast, mortgage holders were over five times more likely to report missing an essential payment in the last month (8.1%) than those who own their home outright, while renters were over eight times more likely (14%). This level of missed payments amongst mortgage holders (8.1%) is very high by historical standards; it is the third highest level we have ever recorded for them since we started collecting this data in April 2020, only slightly lower than the record highs of 8.5% seen in March 2023 and November 2023. 

Although missed payment rates rose most among mortgagors and renters, this was driven by rises in missed household bills, credit card or loan payments  rather than missed mortgage or rent payments. For mortgage holders, their missed mortgage payment rate actually dropped 0.2% this month to 2.4%, while credit card or loan missed payments rose from 2.3% to 4.7% and missed household bill payments rose from 2% to 4.8%. This suggests that many mortgage holders may be prioritising their mortgage payments over other household bills. 

Renters were over eight times more likely to have missed a household payment than outright owner households in the month to March 8th

Over half of households are making adjustments to their essential spending habits

Over half of households (54%) 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 significantly lower than the 60% seen last March, though financial hardship still remains much higher compared to 2020 and 2021.

Over half of households made at least one adjustment to cover essential spending in the last month

Household consumer confidence falls

Consumers’ confidence in their own financial situations fell this month. Net confidence in their current household situation fell by 3 points to +20 while confidence in their future situation fell by 5 points. One in four (24%) consumers believe their household financial situation will get better over the next 12 months, whilst three in ten (31%) think it will get worse (giving a net score of -8). 

Only one in five (21%) consumers think the UK economy will get better over the next 12 months, whilst half (50%) believe it will get worse, giving a net confidence in the future economy of -29, relatively unchanged from last month (-31).

Consumer household confidence fell in the month to March 8th

Did the budget impact consumer sentiment?

This month’s fieldwork took place between 8th and 10th March, just two days after the Government’s Spring Budget. To gauge whether this had any impact on consumer confidence, we asked consumers the reasons behind their beliefs in the potential improvement or deterioration of their household financial situation. 

Just 13% of responses from consumers mentioned policies from either the Spring Budget  or those previously announced in the Autumn Statement in their reasons behind their predicted change in their household financial situation. The majority of these responses were from pensioners, either mentioning the April 2024 pension increase (announced in the Autumn Statement) as a reason for their improvement, or feeling that the Spring Budget included nothing for them as a reason for their deterioration:

“As the economy gets better so will the cost of living and a good rise in the pension next month helps things to move along'” Male, North West, feeling that their household situation will improve a little

“Pensioners have not benefited from the [spring] Budget” Male, Eastern England, feeling that their household situation will worsen a little

“Because we are pensioners and will not benefit from the National Insurance cuts and the rise in pensions will get swallowed up by rising costs.”  Female, South East, feeling that their household situation will worsen a little

Other responses not related to pensions were generally negative about the recent Spring Budget, with only a handful of responses referencing the cut to National Insurance contributions.

“No increase in tax thresholds and increase in taxation will eat into my available income.” Male, South West, feeling that their household situation will worsen a little

“The reduction in National Insurance will help.” Female, Eastern, feeling that their household situation will improve a little

“The cost of essential everyday items is still rising. Council tax is rising. I cannot get a pay rise. Although the NI rate is reduced by 2%, the tax-free allowance stays the same so I'm still worse off.” Male, Eastern England, feeling that their household situation will worsen a lot

“I will have less money despite the reduction in National insurance as council tax has increased and inflation is still high.” Female, North West, feeling that their household situation will worsen a little

As the final two quotes illustrate, upcoming increases to council tax are a significant concern for many consumers; 7% of responses from consumers who feel their household financial situation will worsen pointed to council tax increases.

Despite many consumers referencing the Budget or council tax rises, the vast majority of consumers did not cite either of these in their reason why they feel their household situation will improve or worsen. Instead, as we saw earlier this year in January, those feeling their situation will improve predominately pointed to their disposable income improving through pay rises or changes in their personal circumstances.

“Both myself and my wife are due pay rise in the coming months” Male, North West, feeling that their household situation will improve a little

“My health has greatly improved, which means I can get more work done.” Male, Northern Ireland, feeling that their household situation will improve a lot

And in contrast, the majority of consumers feeling their situation will worsen cited further rising prices, bills and the overall cost of living. 

“Prices will continue to rise for insurance, food, clothes, energy etc”  Female, East Midlands, feeling that their household situation will worsen a lot

“I think that the cost of living is making it nearly impossible for some people to manage and that debt is a huge issue for many individuals”  Female, Wales, feeling that their household situation will worsen a lot

Summary

This months’ tracker data has illustrated that many households are continuing to suffer the effects of the cost of living crisis, with the missed payment rate sitting higher than the average 2023 level. In addition, more consumers still believe their household financial situation will worsen (31%) over the next 12 months than believe it will improve (24%). Some  consumers referenced the recent Spring Budget (or economic policies soon to come into effect from the Autumn Statement) in their reasons for why they think their household situation will improve or worsen. However the vast majority of consumers did not mention the Budget and instead pointed to either changes in their personal circumstances (e.g. pay rises) or their difficulty navigating ever more price rises as the main drivers of their household financial situation.

Methodology

The fieldwork was conducted by Yonder on behalf of Which? between 8th and 10th March 2024. A sample of 2,071 consumers was surveyed online and weighted to be nationally representative.