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23m expect their finances to worsen over next three months

07/07/2022
RETIREMENT
  • The proportion of people who expect their finances to worsen in the next three months is at its highest since LV= survey began
  • People continue to spend more and save less as outgoings continue to rise driven by rising inflation

 

Research from pensions and retirement specialist LV= highlights the personal finances of millions of people are continuing to worsen.

The LV= Wealth and Wellbeing Monitor* ¬- a quarterly survey of 4,000 UK adults – reveals that millions of people expect their finances to worsen over the next three months,  total monthly outgoings are rising, people are saving less while spending in supermarkets is rising and socialising is falling.

The June 2022 figures are the worst they’ve been since June 2020 when LV= started surveying consumers during the pandemic. This highlights how the confidence of UK consumers is falling sharply as millions feel the effects of rising prices.

The LV= Wealth and Wellbeing Monitor* ¬reveals…  

  • Worsening financial outlook: 43% (23m) expect their finances to worsen over the next three months
  • Deterioration in finances over past three months: 53% (28m) say their finances have deteriorated over the past three months. 
  • Outgoings increase: 61% (32m) say their total monthly outgoings have increased over the previous three months 
  • Saving falls: 30% (16m) said the amount they are saving has fallen in the last three months
    Supermarket spend is up, socialising down:     58% (31m) have seen an increase in their supermarket spending, while 31% (16m) are spending less money on socialising

Growing numbers are feeling the effects of the cost of living crisis…

  • 36% (19m) of UK adults have described their financial situation as “struggling” and this has increased each quarter over the past year 
  • 38% are worried about money, rising by 10% since June 2021
  • People aged 18-34 (46%) were the age group most worried about money. Parents of young children (aged 0-10) were also very worried about money (44%). 

“The results of the latest LV= Wealth and Wellbeing Monitor highlight how the finances of millions of people are being squeezed by the large rise in the cost of living. The indices for savings, financial outlook and outgoings are the worst recorded since we started surveying consumers during the coronavirus pandemic, and worse than in the dark days of covid. 

“Consumer sentiment had been steadily improving between spring and early autumn 2021 but the sharp rise in the cost of living has dented consumers’ confidence. Millions of people say they are struggling financially and standards of living are falling across the country.

“Rising energy prices are becoming a significant problem for many people, and many families with young children and low income households are struggling.”


Clive BoltonManaging Director of Protection, Savings and Retirement at LV=

LV= uses indices to track overall changes to spending, saving and finances. The indices are calculated by: subtracting the % who stated a negative change over the past three months (e.g. decrease/ worse) from the % who stated a positive change over the past three months (e.g. increase/ better), to work out the overall impact.

LV= Wealth & Wellbeing IndicesJun-20Sep-20Dec-20Mar-21Jun-21Sep-21Dec-21Mar-22Jun-22Change QonQ
How Finances have changed in last 3 months-18-18-25-9-8-11-20-34-44-10
How Finances might look 3 months from now-6-8-14-2-1-5-12-31-320
Total Monthly outgoings-92-16-1114263949490
Income from work-11-10-71687572
Amount saving81-1102-1-3-6-13-8
Amount saving into pensions10-4234365-1
Spend at the supermarket272113181626364643-3
Spend on socialising-53-37-52-47-96-2-4-10-6

The above data shows that there have been significant changes to some indices between December 2021 and March 2022.

  • Finances over past three months: The index measuring people’s finances over the past three months was -34 in March 2022. More people say their finances have got worse over the past three months compared to Dec 2021 when the index was -20. The figure is the lowest recorded since the Monitor started in June 2020. 
  • Financial outlook: The index measuring financial outlook for the next three months was down sharply at -31 in March 2022 compared to -12 in Dec 2021. A negative index means more people think their finance will worsen over the next three months compared to those who think it will improve. The figure is the lowest recorded since the Monitor started in June 2020. 
  • Income and outgoings: The index measuring income fell to 5 while the index measuring outgoings also hit an all-time high of 49 with a lot more people (58%) saying their outgoings have increased compared to decreased (9%).
  • Savings index: Savings sentiment has also deteriorated. The index measuring saving has fallen to -6 in March 2022 from -3 in Dec 2021, indicating that people are spending more and saving less. 
  • Spending on socialising and at the supermarket: The index measuring spend at the supermarket has increased to 46 in March 2022, the highest figure since the Monitor began. A far greater proportion of people (56% 29m) say their supermarket spend has increased compared to those who say it has decreased (10% 5m).

Notes

LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in June 2020, September 2020, December 2020, March 2021, June  2021, September 2021, December 2021, March 2022 and June 2022.

UK population stats from ONS. Total UK adult population is 52.9m UK adults (aged 18+).