Financial wellbeing in February 2023

Summary

• Levels of consumer financial difficulty remain high. The proportion of households who had missed a housing, bill, loan or credit card payment in the last month was 8.1% in February. 
• The proportion who had made an adjustment to cover essential spending was 59% in February. 15% of people said they had skipped meals due to rising costs.
• There was little change this month in consumer confidence. Confidence in the future of the economy increased slightly but remains low, while confidence in household finances dropped a little.

Financial difficulty levels remain consistent with last month

The proportion of households who had missed a housing, bill, loan or credit card payment in the last month was at 8.1% in February, almost identical to the 8.2% seen in January. 

The beginning of 2023 has not followed the pattern of previous years in which a sharp spike in the missed payment rate in January was followed by a lower rate in February. There was no January spike this year, but nor have we seen a lower rate this month and so overall financial difficulty remains at elevated levels. The rate this month compares to 7.0% in February 2022 and 4.8% in February 2021.

Six in ten (59%) households reported making at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. This is the same proportion as last month and is an increase on last February (52%). 

You can access our complete library of data to understand the challenges facing consumers from our consumer data hub.

Some consumers are going without to manage their food costs

Some consumers are going without as food costs rise. Just over a quarter (27%) said they had gone without some foods due to rising costs, compared to 21% in November. Meanwhile, 15% said they had skipped meals, compared to 12% in November. Nearly one in ten (9%) had prioritised meals for other family members above themselves and 4% had used a food bank.

Consumers are also looking for ways to save on their energy bills, with seven in ten (72%) saying they have put the heating on less due to rising prices, 39% having used less hot water and 19% having had fewer cooked meals.

Whilst the majority of consumers have used the heating less due to price rises, this behaviour will be more extreme in some households than others. Whilst some may be able to save money on heating whilst still keeping their house sufficiently warm, others will not. Three in ten (29%) of those who had put their heating on less said they have often or always felt in physical discomfort this winter as a result. A further four in ten (41%) have sometimes felt physical discomfort, whilst 29% had rarely or never felt this way.

Respondents to previous waves of our consumer insight tracker shared with us their difficulties in keeping their house warm amid rising prices.

"My house is freezing most of the time and when I do put the heating on… my thermostat has not reached 18 degrees since summer and is usually about 14 at the most when I put it on. It is very depressing feeling cold most of the time" - Female, 71

"Our house is cold a lot of the time because the high costs of gas and electric makes a warm house unaffordable" - Male, 30

"The house is cold due to the cost of heating so I am continually wearing layer upon layer of clothes. Saving money on heating allows more money for food" - Male, 85

Consumer confidence remains very low

Confidence in current household finances dropped slightly in February, 38% of consumers described their financial situation as good, whilst nearly a quarter (24%) described their situation as poor, giving a net confidence of +14. This compares to +25 last month. 

Meanwhile, confidence in future household finances remained at a similar level to last month, at -25. Confidence in the future of the economy rose slightly, and is now at -37.