Thumbs up for Budget measures but Chancellor fails to boost consumer confidence

Despite strong support for individual measures in today’s Budget designed to boost household finances, our post-Budget poll has found consumers feeling less confident about their own financial situation and the wider economy.

The latest Which? polling carried out immediately after the 2013 Budget found strong support for individual measures announced today by the Chancellor, including  89% supporting the rise in the personal tax allowance to £10,000 in April 2014 and 87% supporting the announcement to scrap the fuel duty rise. Two thirds (66%) of people say they support the Government’s announcement to extend the housing Shared Equity Scheme and more than half (57%) support moves to underpin new mortgage lending.

However, despite this strong support for individual Budget measures, we found a third (33%) of people now feel less confident about the prospects of the economy over the coming year and a similar proportion (28%) feel less confident about their personal finances.

Further to our recent findings that households have reduced their non-essential spending by over £3000 a year since the beginning of the financial crisis, our poll today reveals another blow to consumer confidence with six in ten people (64%) saying they are reluctant to spend money on major household purchases like new appliances or cars. In fact over half of consumers (55%) plan to cut back on their spending significantly in the coming year.

Our poll reveals further bad news for the Chancellor with six in ten people (59%) agreeing that the Government should rethink their economic plan, and over half (53%) feeling that the Government’s economic plan isn’t working. Half of people (50%) are not satisfied with the direction of the UK and 44% expect their own personal finances to worsen in the next 12 months, an increase of five percentage points compared to the past month.

Six in ten (60%) consumers say their family budget will be tighter in 2013 than it was in 2012.  

Which? executive director, Richard Lloyd, said:

“While people welcome all the financial help they can get,  today’s Budget has not only failed to increase consumer confidence but has left people feeling worried about both their own finances  and the wider economy.

“The UK economy is already suffering from the devastating impact of a collapse in consumer confidence, with households reducing their spending by £220 billion since the financial crisis began.

“The UK has never before come out of recession without an increase in consumer spending, so the Chancellor must do more to put consumers at the heart of his plans for a return to growth.”

Notes to editors

Methodology:

Populus, on behalf of Which?, interviewed 1099 GB adults online on the 20th March 2013, following the Budget.  Results were weighted to be demographically representative of all GB adults. Populus is a member of the British Polling Council and abides by its rules.

To get a complete breakdown of the poll results please contact Meera Khanna on meera.khanna@which.co.uk or 07970 132811

Our recent research on the impact of the reduction of consumers’ non-essential spending on the economy can be found via the press notice.

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