Consumer worries in August 2021
Worry about the cost of living has increased. 71% of consumers say they are worried about energy prices even before the energy price cap rises on 1 October
Concern around the security of data shared by consumers remains high and appears to be increasing gradually over time. 64% of people said this is a concern.
Worry about interest rates on savings increased substantially at the start of the pandemic, and has remained at this raised level since. 35% of people who are worried about this said they had switched their savings account to get a better interest rate.
Concern about the cost of living rises
Recent weeks have seen rapid developments in the Covid-19 situation in the UK. The majority of UK adults are now fully vaccinated. Many of the restrictions placed on daily life were lifted on 19th July in England, with similar changes in the devolved nations following shortly afterwards. As the UK returns to something more closely resembling normality, we explore some of the main non-Covid-19 worries for consumers as the country moves into a new stage of the pandemic.
We collect quarterly data on how worried consumers are about a range of issues such as prices, interest rates and data security. Compared to May, the August data showed an increase in concern about costs of living. The proportion of consumers who are worried about energy, food and fuel prices rose by 6, 7 and 9 percentage points respectively between May and August.
The greatest level of concern is about energy prices. Nearly three quarters (71%) of consumers are worried about these in August, making it the biggest consumer worry we asked about. This comes shortly after the announcement by Ofgem of an increase in the energy price cap. The cap affects the price paid by about 15 million households so concern may increase further when the increase comes into effect on 1 October.
Worry about fuel prices fell sharply at the beginning of the Covid-19 crisis as the country went into lockdown and travel was limited, decreasing from 58% worried in February 2020 to 33% in May 2020. However, it has been increasing since and is now above pre-pandemic levels at 68%.
Concern about food prices has been relatively stable since the pandemic began, so the increase to 65% of people being worried about them is notable.
The only cost of living item that did not see an increase in worry in August was housing costs, staying at 53%. However, this masks large differences between groups. Less than half (46%) of homeowners are worried about housing costs, compared with 68% of private renters. This gap has remained consistent for some time and may reflect that rents have risen relatively little in the past year. However, this may change if the recent large rises in house prices subsequently feed through to higher rents.
Low interest rates are a concern for savers
Worry about the interest rate on savings previously peaked when the pandemic hit and the UK went into its first lockdown. The proportion worried about this increased from 55% in February 2020 to 65% in May 2020, making it the biggest consumer worry at that time. This increased level of worry about interest rates on savings was likely related to both the increased ability of many consumers to save during lockdown and the reduction in the Bank of England’s base rate leading to lower interest rates for savers.
Although no longer the top consumer worry, the proportion concerned about interest rates has remained at a raised level since then, with 66% worried about this in August 2021.
This month we asked consumers who said they were worried about the savings rate whether they had done anything to mitigate this. Just over a third (35%) had switched their savings account for a better interest rate, 23% said they had bought premium bonds, and 21% said they had invested in stocks and shares. A further 15% said they had spent it and 5% had invested in an asset such as a buy-to-let property. Actions varied by age, with younger consumers (up to 50 years of age) being significantly more likely to invest in stocks and shares and older consumers (50+) more likely to buy premium bonds.
The fieldwork was conducted by Yonder on behalf of Which between 11th and 13th August 2021. A nationally representative sample of 2,075 consumers was surveyed.
If you have any questions or would like to find out more, please email Sophie Beesley at email@example.com