Four in 10 UK adults expect their finances to worsen over the next three months, according to research from LV=.
The mutual’s Wealth and Wellbeing Monitor found 42% of respondents predicting their finances would worsen over the next three months while 44% said their finances had already deteriorated over the past three months.
Almost six in 10 (58%) said their total monthly outgoings had increased in the last three months and 23% said the amount they were saving had fallen in the last three months.
The survey of 4,000 UK adults measuring people’s finances posted an index reading of -34 in March, compared with -20 reading in December 2021 and is the lowest recorded since the launch of the monitor in June 2020. The financial outlook for the next three months was also down to -31 from -12.
The squeeze on people’s finances was illustrated by income index score dropping to five while the outgoings index hit a peak of 49 as many more people (58%) said their outgoings had increased compared to decreased (9%).
Essential spending such as for food increased with the supermarket index posting a reading of 46 in March – a new record for the monitor as a far bigger proportion of people (56%) said their supermarket spend had increased compared to those who said it had decreased (10%).
Clive Bolton, managing director of protection, savings and retirement at LV= said: “The results highlight how the finances of millions of people are being squeezed by the large rise in the cost of living. The indices for savings, financial outlook and outgoings are the worst recorded since we started surveying consumers two years ago.
“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 life to begin to return to normal. However, the sharp rise in the cost of living has caused confidence to fall dramatically.”