- Nearly 23m (42%) UK adults say they are struggling financially, but figures from the LV= Wealth and Wellbeing Research Programme are beginning to stabilise
- 6m expect their finances to improve over the next three months – up from the previous quarter
Research from protection, investment and retirement specialist LV= highlights how the personal finances of millions of people continue to be affected by the rise in the cost of living.
The LV= Wealth and Wellbeing Research Programme* - a quarterly survey of 4,000 UK adults – reveals that 23m (42%) of adults say they are struggling financially.
A large number of respondents say that in the past three months they have seen an increase in their total monthly outgoings (69%/37m) and supermarket spend (68%/36m).
However, some figures have stabilised or improved slightly over the previous three months.
Some 10% (6m) of UK adults say they expect their finances to improve over the next three months - an improvement on the previous quarter when 8% (4m) said this. The proportion of people who think their finances will worsen over the next three months has fallen from 57% (30m) to 46% (25m).
Clive Bolton, Managing Director of Protection, Savings and Retirement at LV=, said:
“The LV= Wealth and Wellbeing Research Programme has highlighted how millions of people have been squeezed financially over the past 12 months as rising energy bills, interest rates and inflation reduce their spending power.
“Millions of people remain gloomy about their finances and are struggling to make ends meet. However, after 12 months of steady deterioration, several of the indices we track have stabilised or improved compared to the previous quarter.
“For example, this is the first time that our two key indices - measuring financial outlook over the next three months and finances over the previous three months - have begun to improve since autumn 2021.
“It’s too early to say if this is the start of a long-term improvement in people’s finances but if the cost of living and inflation begin to ease, people could begin to feel more optimistic about their finances.”
The LV= Wealth and Wellbeing Research Programme indices:
LV= uses indices to track overall changes to spending, saving and finances. The indices are calculated by taking the percentage who stated a positive change over the past three months (e.g. increase/ better) and subtracting the percentage who stated a negative change over the past three months (e.g. decrease/ worse), to work out the overall impact.
- Financial outlook: The index measuring financial outlook for the next three months was -36 in December 2022 compared to -49 in September 2022. 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 index has improved by +13 indicating fewer people have a negative outlook compared to the previous quarter. Some 46% (25m) expect their finances to worsen over the next three months while 10% (6m) think it will improve.
- Finances over past three months: The index measuring people’s finances over the past three months was -49 in December 2022. The negative index indicates that more people say their finances have got worse over the past three months than those saying their finances have got better. However, this index is a small improvement compared to September 2022 when the index was -52, indicating finances may be starting to improve for some. 58% (31m) say their finances have deteriorated over the past three months while 9% (5m) said it had improved.
- Income and outgoings: The index measuring income improved, rising from 5 to 9, as some workers are experiencing pay rises. However for many this is not enough to offset rising outgoings. The index measuring outgoings rose from 57 to 59. Many more people (69%/37m) say their outgoings have increased compared to decreased (10%/5m).
- Savings index: Savings remains low. The index measuring amount saving was -16 in December 2022 from -17 in September 2022.
- Spending on socialising and at the supermarket: The index measuring spending at the supermarket was 57 in December 2022, compared to 48 in September 2022. A far greater proportion of people (68% or 36m) say their supermarket spend has increased compared to those who say it has decreased (12% or 6m), while 32% (17m) are spending less money on socialising
| Jun-20 | Sep-20 | Dec-20 | Mar-21 | Jun-21 | Sep-21 | Dec-21 | Mar-22 | Jun-22 | Sep-22 | Dec-22 | Index change vs. last quarter | |
| Financial outlook over next three months | ||||||||||||
| Improve | 17% | 14% | 12% | 18% | 17% | 15% | 14% | 10% | 11% | 8% | 10% | |
| Worsen | 23% | 22% | 26% | 20% | 18% | 20% | 25% | 42% | 43% | 57% | 46% | |
| Index | -6 | -8 | -14 | -2 | -1 | -5 | -12 | -31 | -32 | -49 | -36 | +13 |
| Finances over past three months | ||||||||||||
| Better | 17% | 14% | 11% | 18% | 16% | 15% | 13% | 10% | 9% | 7% | 9% | |
| Worse | 35% | 32% | 36% | 27% | 25% | 26% | 33% | 44% | 53% | 59% | 58% | |
| Index | -18 | -18 | -25 | -9 | -8 | -11 | -20 | -34 | -44 | -52 | -49 | +2 |
| Income from work | ||||||||||||
| Increase | 10% | 10% | 13% | 16% | 18% | 17% | 17% | 16% | 17% | 17% | 19% | |
| Decrease | 21% | 20% | 20% | 15% | 12% | 9% | 10% | 11% | 10% | 12% | 10% | |
| Index | -11 | -10 | -7 | 1 | 6 | 8 | 7 | 5 | 7 | 5 | 9 | +4 |
| Total monthly outgoings | ||||||||||||
| Increase | 23% | 25% | 19% | 22% | 31% | 38% | 48% | 58% | 61% | 67% | 69% | |
| Decrease | 32% | 23% | 35% | 33% | 18% | 12% | 9% | 9% | 12% | 10% | 10% | |
| Index | -9 | 2 | -16 | -11 | 14 | 26 | 39 | 49 | 49 | 57 | 59 | +3 |
| Amount saving | ||||||||||||
| Increase | 23% | 19% | 23% | 27% | 21% | 18% | 16% | 18% | 17% | 16% | 17% | |
| Decrease | 14% | 18% | 24% | 17% | 19% | 19% | 20% | 23% | 30% | 33% | 33% | |
| Index | 8 | 1 | -1 | 10 | 2 | -1 | -3 | -6 | -13 | -17 | -16 | +1 |
| Amount paying into pensions | ||||||||||||
| Increase | 8% | 8% | 9% | 10% | 10% | 10% | 11% | 13% | 14% | 13% | 14% | |
| Decrease | 7% | 8% | 13% | 8% | 7% | 6% | 7% | 6% | 8% | 10% | 8% | |
| Index | 1 | 0 | -4 | 2 | 3 | 4 | 3 | 6 | 5 | 3 | 6 | +3 |
| Spend at the supermarket | ||||||||||||
| Increase | 42% | 35% | 30% | 33% | 29% | 36% | 46% | 56% | 58% | 63% | 68% | |
| Decrease | 15% | 14% | 18% | 15% | 13% | 10% | 10% | 10% | 15% | 14% | 12% | |
| Index | 27 | 21 | 13 | 18 | 16 | 26 | 36 | 46 | 43 | 48 | 57 | +8 |
| Spend on socialising | ||||||||||||
| Increase | 7% | 11% | 8% | 7% | 22% | 28% | 21% | 20% | 21% | 19% | 19% | |
| Decrease | 60% | 48% | 61% | 54% | 31% | 22% | 23% | 24% | 31% | 33% | 32% | |
| Index | -53 | -37 | -52 | -47 | -9 | 6 | -2 | -4 | -10 | -14 | -13 | +2 |
Notes to Editors
- * LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in December 2022.
- UK population stats from ONS. Total UK adult population is 53.2m UK adults (aged 18+).
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About LV=
LV= is a leading financial mutual and serves over 1.16 million members with a range of financial products. 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. We offer our services direct to consumers, as well as through IFAs.
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