Financial wellbeing in the December 2023 tracker

Summary

• There was a large decrease in reported levels of financial difficulty in December 2023 as 6.5% of people said they had missed or defaulted on a loan, credit card, housing or household bill payment in the past month. This is the lowest level recorded in the past two years, although we historically observe a fall in December.
• Over half of households (55%) 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.
• There was little change in consumers’ confidence this month compared to the last. There were small improvements in consumers’ outlook for the UK economy and their current household situation, while confidence in their future household situation fell slightly.

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

Financial difficulty falls in December

Following the dramatic rise in the reported missed payment rate in November, this month we have seen a large fall. The proportion of households that missed a payment fell in the month to December 8th, with 6.5% of households reporting that they missed a housing, bill, credit card or loan payment. 

This rate of missed payments is the lowest level we have recorded in the last two years, surpassing the previous low of 6.7% in December last year. We typically observe a drop in missed payments this month, as shown by last year’s rate that fell 1.2% from the month preceding it. This missed payment rate also closely aligns with the levels typically observed during this time of year (6.7% in December 2022, 6.1% in December 2021 and 6.3% in December 2020).

6.5% of households said they had missed a payment in the month to December 8th

Over half of households (55%) 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 very similar to the level observed this time last year (56%) but much higher than the prior Decembers (42% in 2021 and 37% in 2020). 

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

These figures are encouraging in showing that, in the lead up to Christmas, levels of financial difficulty are lower than periods earlier this year. It also suggests that the record missed payment rate in November may have been an exceptional occurrence and not representative of the overall trend. On the flip side we often see a fall in reported financial difficulty in December, followed by a rise in January, meaning that these lower rates may not persist into the New Year.

Consumer confidence remains at similar levels to November

There was little change in consumers’ confidence for December. Consumers’ confidence in their current household financial situation and the outlook for the UK economy improved slightly this month, following two straight months of fall. 

Consumers’ views on their current household situation rose slightly this month to +17, up from +14 last month.

Only about one in six (17%) of consumers think the UK economy will get better over the next 12 months, whilst 53% believe it will get worse, giving a net confidence in the future economy of -35.

Confidence in future household finances fell slightly this month to -14. This was calculated from 1 in 5 (20%) consumers thinking their household financial situation will get better over the next 12 months and 1 in 3 (34%) thinking it would get worse.

Consumer confidence fell again in the month to December 8th

Methodology

The fieldwork was conducted by Yonder on behalf of Which between 8th and 10th December 2023. A sample of 2,073 consumers was surveyed online and weighted to be nationally representative.