Satisfaction with living standards plunges amid energy crisis
The consumer group found Brits’ satisfaction with UK living standards and income has plunged ahead of more energy bill hikes.
The Which? consumer insight tracker shows satisfaction with living standards and income has crashed to its lowest point since 2014.
The 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.
Which? says 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% 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 about 6.8% of households (an estimated 1.9 million) missed or defaulted on at least one mortgage, rent, loan, credit card or other bill in the past month. The comparable estimate for August 2021 was 4.5%.
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% seen just a year ago before the cost of living began to rocket.
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.”