Consumer confidence and financial wellbeing in March 2021
Consumer confidence is stable this month, with all measures at or around pre-pandemic levels.
Financial difficulty stays at similar levels, with 5.9% of consumers reporting having missed a bill, housing, credit card or loan payment in the last month.
Consumer confidence remained fairly stable this month, with confidence in the future of the economy growing slightly, from -22 points in February to -13 in March. This is a major increase compared to just two months ago, when confidence was very low, at -57 points. All three measures of confidence are now at a similar level to before the pandemic in February 2020. Recent improvements in confidence may be related to the success of the UK’s mass vaccination programme and the announced roadmap to easing coronavirus restrictions.
Confidence in the future of the economy has varied considerably in the past year, dropping when cases have risen and more restrictions have been put in place and increasing following good news about vaccine approvals and so on. It therefore remains to be seen whether confidence will stay at the less pessimistic levels observed in February and March, and what increased confidence will mean in practice once restrictions ease and consumers have more opportunities to spend their money. Previous analysis of our tracker data has indicated that many consumers might choose to hold on to savings made during lockdown, but this might change as confidence levels in the economy increase.
Similar to consumer confidence, measures of financial difficulty remained at similar levels to those seen in February. 38% of consumers had made an adjustment to cover essential spending this month (e.g. borrowing from friends and family, using savings, taking out a loan), consistent with the 40% in February.
As explored in previous months, some types of households are particularly susceptible to financial difficulty. For example, 50% of 18-29 year olds had made an adjustment to cover essential spending, compared to just 17% of those 65 and over. Half of renters had done so compared to 32% of homeowners, and those who had been furloughed, put on reduced hours or enforced leave due to the coronavirus were much more likely to have made an adjustment (57%) than those working as normal (43%).
In terms of more severe financial difficulties, 5.9% of people reported missing or defaulting on a bill, housing, credit card or loan payment in the last month, compared to 4.8% in February. Again, certain groups were more likely to have missed a payment, rising to as high as 12% in the furloughed group and 14% among those seeking work.
The high levels of financial difficulty among certain groups highlights the potential risks to livelihoods as restriction ease and support programmes are rolled back. As described, consumers whose incomes have been affected by the pandemic have higher levels of difficulty despite having most of their salaries covered by the job retention scheme, and focus will be on what happens to those with mortgages when new payment holidays are replaced by tailored support at the end of March.
The fieldwork was conducted by Populus on behalf of Which between 12th and 14th February 2021. A nationally representative sample of 2,114 consumers was surveyed.
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