New Which? research reveals the devastating impact the cost of living crisis is having on consumer satisfaction with living standards and finances, even before another huge hike in energy bills.
The Which? consumer insight tracker shows satisfaction with living standards and income has crashed to its lowest point since 2014.
The consumer champion’s latest survey found just over half of consumers are satisfied with their standards of living (55%) in August 2022. Even fewer are content with their household income (39%) and savings (34%).
With inflation at a 40-year high, driving the fastest real-terms fall in pay on record, confidence in household finances has plunged to the level it was at the start of the pandemic.
Worryingly, this downward trend is set to continue with eye-watering increases to the energy price cap predicted to come this winter and hundreds of pounds being added to annual food bills.
The situation has left households feeling very pessimistic about their future finances and the prospects of the economy, with dire net confidence scores of -40 and -60, respectively. It is reflected in consumer concern levels, with 93 per cent of consumers telling Which? they are worried about energy prices.
The missed payment rate fell slightly in August, but it is high for this time of year. Which?’s tracker showed around 6.8 per cent of households (an estimated 1.9 million) missed or defaulted on at least one mortgage, rent, loan, credit card or other bill in the last month. The comparable estimate for August 2021 was 4.5 per cent.
The survey also showed that the number of people in financial difficulty has stayed at consistently high levels. Six in 10 (59%) consumers said their household has had to make an adjustment – such as cutting back on shopping, dipping into savings or borrowing – to cover essential spending in the last month. This is a significant hike on the 40 per cent seen just a year ago before the cost of living began to rocket.
These latest findings reinforce the need for the government to take urgent further action to support those who are struggling. Failure to act could mean countless more families are pushed into acute financial hardship.
Ahead of the energy price cap announcement on Friday 26th August, it is clear that the current level of cost of living government help will not sufficiently protect consumers. Which? is calling on the government to increase the amount of economic support for families and households so they can make ends meet.
Ministers should also work with businesses to look at what more they can do for those facing serious financial hardship. Businesses in essential sectors – such as supermarkets, energy and telecoms – should do everything in their power to make sure customers are getting a good deal.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“It was meant to be the year that we moved on from Covid, but the cost of living crisis has left consumer confidence in ruins.
“Household finances are at breaking point and many consumers will simply not be able to afford the eye-watering upcoming hikes in their energy bills.
“The government must move quickly to increase the amount of financial support it is providing to families and households who are struggling. Tackling the cost of living crisis must be at the top of the new Prime Minister’s in-tray. Businesses should also do everything in their power to make sure customers are getting a good deal and those facing serious financial hardship are protected.”
Notes to editors
Figure 1 – satisfaction with income savings and standard of living is decreasing
Figure 2 – consumer confidence is very low
Figure 3 – six in ten households made at least one adjustment to cover essential spending in the last month
Figure 4 – the missed payment rate fell in August but is high for the time of year
- The Consumer Insight Tracker is an online poll conducted by Yonder on behalf of Which?. A sample of 2,090 consumers was surveyed between 12th and 14th August and weighted to be nationally representative.
- The survey indicates that between 5.7 per cent and 7.8 per cent of households missed or defaulted on at least one mortgage, rent, bill or credit payment in the last month in August, with an average estimate of 6.8 per cent.
- Based on Which?’s survey and the ONS estimate for the number of households in 2020 of 28.1m, Which? estimates that between 1.6 million and 2.2 million households missed or defaulted on a mortgage, rent, bill or credit payment in the last month in August 2022, with an average estimate of 1.9 million.
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