Nearly 10m expect their finances to improve over the next three months

• Vaccine roll-out leads to big fall in number of people worried about contracting covid 
  
• Although millions still worry about state of their finances and future earnings, sentiment is improving

Research from pensions and retirement specialist LV= highlights how the financial confidence of UK consumers is beginning to improve as coronavirus vaccination programme gathers pace and infection rates fall.

The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000+ UK adults – reveals that a rising proportion of adults say their finances have improved over the past three months and expect their finances to improve over the next three months, compared to the end of 2020.

The LV= Wealth and Wellbeing Monitor reveals:

• 18% (9.6m) people expect their finances to improve over the next three months, compared to 12% (6.4m) surveyed at the end of 2020.
• 18% (9.5m) people said their finances had improved over the past three months, compared to 11% (5.8m) surveyed at the end of 2020
• 27% (14.5m) say they have increased their savings over the past three months, compared to 23% (12.1m) surveyed at the end of 2020.
• There has been a big fall in the proportion of people worried about contracting Covid-19. In March 2021 23% (12.1m) people said they were worried about contracting the virus compared to 32% (17.1m)  in December 2020

Clive Bolton, Managing Director of Savings and Retirement at LV=, said:

“The last three months have been difficult for millions of people, but increasing numbers are becoming more optimistic about the future.  LV=’s research indicates that although many people are still struggling financially, fewer people are worried about contracting Covid and an increasing proportion expect their finances to improve over the next three months.”

The LV= Wealth and Wellbeing Indices:

LV= uses indices to track overall changes to spending, saving and finances. The below indices are calculated by: subtracting the % who stated a negative change over the past 3 months (e.g. decrease/ worse) from the % who stated a positive change over the past 3 months (e.g. increase/ better), to work out the overall impact.

The above data shows that although a number of indices are still negative, there has been a positive improvement to all indices between Dec 2020 and March 2021. More detailed data on the indices, including trend graphs, have been included alongside this press release.

• Personal finances sentiment improves: The index measuring the change to personal finances over the past three months has improved 16 points from -25 in December 2020 to -9 in March 2021. Although many are still struggling financially, in March 2021 we’ve seen an increase in those with improving finances.
• Financial optimism improves: The index measuring financial outlook has risen from -14 in December 2020 to -2 in March as a growing number of people expect their finances to improve over the next three months.
• Savings rates increase: The index measuring saving behaviour has risen from -1 to 10 between December 2020 and March 2021, likely due to lockdown causing reduced outgoings. The index measuring pension saving also rose, going from -4 to 2 between December 2020 and March 2021.
• Spending in supermarkets remains elevated but socialising is down: The index measuring supermarket spend rose from 13 to 18. Due to lockdown, socialising spend remained low at -47 (compared to -52 in Dec 2020). 

Clive Bolton, Managing Director of Savings and Retirement at LV=, added:

“Figures from the LV= Wealth and Wellbeing Monitor highlight just how difficult life has been over the last 12 months. The finances of millions of people have deteriorated since the summer but there is a growing confidence among consumers that their finances will improve over the next three months.

“Savings rates are increasing and a sense of growing optimism driven by the vaccine roll-out and the prospect of easing of lockdown could help drive a strong economic recovery in the second half of this year. That will be good news to the millions of people who have seen their jobs and finances damaged by the pandemic over the past 12 months.”

Notes to Editors

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

**UK population stats from ONS. Total UK adult population is 52.7m UK adults (aged 18+).