The vaccine rollout and a planned end to lockdown has boosted consumer confidence about their future health and wealth prospects.
The latest Wealth and Wellbeing Monitor from LV= shows that rising proportion of adults said their financial situations improved over the last three months, and a rising number expect their finances to improve over the next three months, when compared to figures at the end of 2020.
The data shows 18 per cent of people expect their finances to improve – compared to just 12 per cent at the end of last year. Almost a third (27 per cent) said they had increased savings over the past three months.
The monitor showed there had also been a significant fall in the number of people worried about contracting Covid, with 23 per cent of people highlighting this as a concern in March compared to 32 per cent of people in December 2020.
However LV= said that while this shows financial confidence is behind to improve there are millions of people still concerned about the state of their finances and potential future earnings.
LV= managing director of savings and retirement Clive Bolton, 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.”
LV= uses four main indices to track overall changes to spending, saving and finances. Although many of these are still negative overall, all have seen a positive change over the past three months
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).
Bolton 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.”
He adds that 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.”