Research from pensions and retirement specialist LV= highlights how 25% (13m) UK adults say they expect their finances to worsen over the next three months.
The figures are the worst since December 2020 and highlight how the confidence of UK consumers is faltering as fears about a resurgence of coronavirus rise.
The LV= Wealth and Wellbeing Monitor* ¬- a quarterly survey of 4,000+ UK adults – reveals:
“The Covid-19 pandemic has been incredibly difficult for the nation and had a huge impact on the lives, personal finances and mental health of millions of people.
“Consumer sentiment had been steadily improving between spring and early autumn 2021 as the success of the vaccine programme, fall in death rates and easing of lockdown restrictions allowed to life to begin to return to normal. However, the appearance of the Omicron variant and rising infection levels has knocked confidence back to levels last seen in the dark days of December 2020.
“Inflation is becoming more of a problem for many people who say their outgoings have increased, particularly those who are retired. Rising prices coupled with poor returns on deposit accounts will dismay pensioners whose only or main source of retirement income is the state pension. Many will be financially squeezed as the cost of essential items like home heating rise while returns from savings accounts – which typically form the bulk of retired people’s savings - remain low. However, the economy remains relatively strong and wages are rising for those people whose jobs are unaffected by lockdowns.
“Millions of people have endured a difficult Christmas and New Year but hopefully the current booster vaccine programme will be successful and confidence will return as the virus comes under control.”
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 Indices||Jun-20||Sep-20||Dec-20||Mar-21||Jun-21||Sep-21||Dec-21||Change QonQ|
|How finances have changed in last 3 months||-18||-18||-25||-9||-8||-11||-20||-9|
|How finances might look 3 months from now||-6||-8||-14||-2||-1||-5||-12||-7|
|Total monthly outgoings||-9||2||-16||-11||14||26||39||+13|
|Income from work||-11||-10||-7||1||6||8||7||-1|
|Amount saving into pensions||1||0||-4||2||3||4||3||-1|
|Spend at the supermarket||27||21||13||18||16||26||36||+10|
|Spend on socialising||-53||-37||-52||-47||-9||6||-2||-8|
The above data shows that there have been significant changes to some indices between September and December 2021.
LV= is a leading retirement and protection specialist. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.
LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited (LVFS) and trading styles of the LV= Group of Companies.Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF.