Households fear financial wellbeing will deteriorate sharply – survey

UK households believe their financial wellbeing over the coming year will deteriorate “sharply” with confidence at its most downbeat in 15 months, according to a survey.

Only higher-income households are seeing an improvement in their financial situation, the S&P Global UK Consumer Sentiment Index (CSI) survey found.

The CSI, tracking household financial wellbeing, labour market conditions, household spending, savings and debt, reached 45.3 in March, down slightly from 45.4 in February – where readings below 50 signal a decrease or deterioration.

A continued reduction in disposable incomes led to an overall downbeat spending environment, with households noting that cash available to spend continued to diminish, though at a rate that was unchanged on the month and weaker than the long-run average.

However the survey, collected monthly since 2009 and based on a panel of 1,500 UK households, revealed a growing appetite for borrowing, with households finding it easier to secure credit helped by recent rate cuts.

S&P Global Market Intelligence economist Maryam Baluch said: “Consumer confidence across UK households remained pessimistic in March.

“Headwinds to the labour market and a more general slowdown in the UK economy affected households’ perceptions on their financial health over the coming months.

“In fact, March data revealed that financial wellbeing over the coming year is set to deteriorate sharply. Sentiment regarding the outlook was the most downbeat in 15 months. Firms also continued to express their concerns around savings and cash availability.”

Pessimism towards job security persisted, with households signalling negativity for a third consecutive month – in stark contrast to the optimism recorded throughout most of 2024.

Data broken down by home-ownership status revealed that mortgage holders expressed the greatest level of pessimism.

The findings are based on a survey of 1,500 UK households between March 6-10.