Consumer Insight Report 2019 East Midlands

A comprehensive view of consumers from the East Midlands using Which?'s consumer insight tracker and other data sources.

Foreword from Which? chief executive, Anabel Hoult

During my time at Which? I’ve quickly recognised that one of our greatest strengths is understanding what consumers want and need. They are at the heart of everything we do and we’re constantly striving for change in the areas where we feel that people deserve better.

Our Consumer Insight reports are a really important step in demonstrating our knowledge base and our understanding of consumers across the UK. For the first time we’ve produced 12 reports covering Wales, Scotland, Northern Ireland and the nine regions of England which highlight the spending habits, optimism, trust and worry of consumers in these areas.

This is a unique body of work, the first of its kind, which has allowed us to compare trends across the UK. As a result of these reports, we know that more people in Yorkshire and the Humber were satisfied with their household income (55%) than the UK average (50%); we also know that more Londoners felt financially squeezed (32%), compared to 27% on average in the UK.

Introduction to Which?


Which? is the largest consumer organisation in the UK with over 1.3 million members and supporters, more than 80,000 of whom are based in the East Midlands. We operate as an independent, apolitical, social enterprise working for all consumers and funded solely by our commercial ventures. We receive no government money, public donations, or other fundraising income. Which?’s mission is to make individuals as powerful as the organisations they have to deal with in their daily lives by empowering them to make informed decisions and by campaigning to make people’s lives fairer, simpler and safer.

Methodology

Populus, on behalf of Which?, has conducted bi-monthly surveys of more than 2,000 consumers per survey across the UK since 2012 to gauge perception of and attitudes to the consumer landscape, known as the Consumer Insight Tracker. These data are weighted to be demographically representative of the UK population, and are published on consumerinsight.which.co.uk. To understand the key consumer attitudes in 2018, Which? has boosted these data to a minimum of 1,000 consumers representative of each region of the UK. This report is based on a sample of 1,000 respondents from the East Midlands.

We have supplemented our own data with figures from other organisations to present a more comprehensive comparison between consumer perception and consumer reality in Wales. In this report, we have made use of data from the Office of National Statistics (ONS), Economic Statistics Centre of Excellence (ESCoE), the Resolution Foundation, UK Finance and the Office of Rail and Road (ORR).

Executive summary


This year for the first time, Which? has published research seeking to unpick trends in the optimism, trust and worry felt by people living in the East Midlands, offering a snapshot of how consumers felt about their financial future and the trust they have in public services and vital industries like rail and broadband.  

Our research shows that 70% of people living in the East Midlands were happy with their standard of living, while 51% were satisfied with their household income, figures that broadly reflect the trends across the UK. When assessing their financial situation, 48% of people in this region were happy with their position. When forecasting finances for the year ahead, 27% thought that their situation would improve, while 25% thought it would get worse.

Social and financial satisfaction


The trends emerging from our consumer tracker data here are clear; satisfaction with life overall (66%), standard of living (70%) and household income (51%) in the East Midlands was in line with that of overall UK satisfaction levels. However, two fifths (39%) of people in the East Midlands were dissatisfied with their level of savings, the same as the UK, which suggests that a significant proportion of the population would like to have saved more.

Beyond these headline trends, factors like age impacted the outlook held by consumers in this region. Unsurprisingly, 89% of over 65s were satisfied with the amount of leisure time they have, compared to 59% of 18-29 year olds. Similarly, 66% of over 65s were satisfied with their savings, compared to 31% of 18-49 year olds.

Two thirds of those living in the East Midlands felt satisfied with their life overall (66%), while 70% were satisfied with their household’s standard of living and 51% with their household’s level of income.
70%
were satisfied with their household's standard of living

Proportions of people satisfied with:

Financial outlook


Across our Consumer Insight Report for the East Midlands, we have observed a relatively high degree of similarity between the perceptions and outlooks held by UK consumers and those in this region. Using data from the ONS and ESCoE (Economic Statistics Centre of Excellence), we can establish a baseline understanding of the East Midlands economy as a foundation for our analysis. The unemployment rate in the region at the end of 2018 was 5%, meaning it sat above the UK average figure of 4%, and near the North East’s nation-wide high of 5.4%. Interestingly, the rate of growth for the East Midlands in 2018 was 1.4%, the same as the UK as a whole, which may explain why many of the figures on financial outlook mirror those of the UK average.

Half (48%) of people living in the East Midlands felt that their financial situation was good, nearly matching to the UK figure of 49%. When asked to forecast the performance of  household finances in the next year, the proportion of respondents who said that they expected their financial situation to improve (27%) was markedly similar to the proportion who thought it would worsen (25%). This compares to 45% of respondents who thought that the UK economy would worsen in the next 12 months. This trend of greater optimism shown toward personal finances than nation-wide finances was representative of the UK and suggests that consumers don’t necessarily associate a worsening UK economy with negative consequences for their own finances.

Consumer finances outlook:

Note: Does not sum to 100% due to the exclusion of ‘neither’ and ‘don’t know’

Consumer spending


Establishing the spending habits of consumers in the East Midlands was an important step in understanding consumer priorities. In this section, Which? has analysed ONS Living Costs and Food Surveys for 2015/16 and 2016/17, along with ONS data on relative regional consumer price levels of goods, services and rental and housing costs in order to articulate the demands of spending in the East Midlands. These statistics reveal that consumer expenditure in the East Midlands averaged £615 a week, slightly less than the UK average figure of £647, while prices were 0.4% cheaper than the UK average.

The median figure for annual earnings in the region was £22,480 compared to £24,006 for the UK as a whole, meaning that consumers in the region were earning 6% less. This is comparable with the difference in expenditure, which was 5% lower than the UK average, suggesting that people in the East Midlands might be spending less than the average UK household because they are earning less.

Further Which? analysis reveals that on average, households in the East Midlands spent around 27% of all their expenditure on housing, utilities and communication, 14% on transport, 32% on groceries, goods and services and 19% on recreation. When looking at the actual monetary outgoings recorded by consumers in the East Midlands, it appears that people living here were spending less than the UK average on housing, food and recreation.

Household spending per week

Spending expectations


We asked consumers in the East Midlands how likely they were to increase or decrease their expenditure over the next few months. While a large proportion said they were likely to keep their spending the same, a quarter (24%) were looking to reduce their spending on socialising, eating out and takeaways.  

Energy was the commodity that the largest proportion of consumers in the East Midlands said they were expecting to increase their spending on (31%), matched by the cost of running a car (31%). Breaking down this data by demographic, more over 65s were likely to increase their spending on energy (44%) compared to 15% of 18-29 year olds.

Interestingly, two areas where a significant proportion of consumers were likely to keep their spending the same were mobile phone payments (80%) and broadband (81%). This may be because many consumers will be tied to a minimum contract period before they are able to switch telecoms provider, despite the fact that many consumers could benefit from faster broadband speeds at a cheaper price, if they switched to a different package.

Trust in industries and services


Beyond tracking financial outlook and intentions for managing personal finances into the next year, we also sought to pinpoint the industries and public services that consumers in the East Midlands felt could be trusted to act in the consumer interest.

Across the UK, there was a clear threshold of trust in the health service, with 75% of people trusting their general practitioner (GP), 74% trusting hospitals and 73% trusting the NHS. This trend was mirrored by those living in the East Midlands, where three quarters (74%) felt they could trust hospitals, closely followed by GPs (73%), the NHS (72%) and dentists (67%). However, this trust in the healthcare system did not extend to social care, where just a quarter (24%) thought that this sector could be trusted to work in the consumer interest, a figure falling to 18% among over 65s.

We also found that 59% of people in the East Midlands felt they could trust the food and groceries and water industries, while car dealerships (9%) and estate agents (10%) were the sectors which the smallest proportion trust. This cynicism toward the car market was shared by the UK as a whole, with an identical 9% believing that this sector was worthy of their trust.

Most and least trusted public services and industries:

Consumer concern

In addition to how people felt about their own finances in relation to their income and standard of living, Which? also looked into trends of consumer concern across the East Midlands. The figures suggest that the majority of people living here felt worried about fuel prices (68%), energy prices (66%) and public spending cuts (64%).

At the other end of the scale, fewer consumers in the East Midlands were concerned over the pricing over more discretionary items. For example a quarter (26%) were worried about the prices of cars and electrical goods. When breaking down the results by demographic, more 18-34 year olds were worried about clothing (30% compared to the East Midlands average of 23%). Similarly, 57% of 18-29 year olds were worried about being able to travel around the UK easily, compared to an East Midlands average of 34%.

Top 5 consumer worries in the East Midlands

Financial difficulty


Identifying trends of financial difficulty is a key output from Which?’s Consumer Insight Tracker1. In our measure there are five signs of financial difficulty that we monitor, ranging from the least severe (cutting back only) through to the most severe (defaulting on a loan, bill, mortgage, or rent payment). As such, Which? asked people whether their households had experienced some form of financial squeeze within the past few months which might have necessitated them taking one of these actions, in order to reduce the pressure. We supplemented our own survey results with the findings of the Resolution Foundation’s ‘Low Pay Britain 2018’ report to add context of the extent to which respondents’ experience of squeeze forms part of a broader trend of financial difficulty in the East Midlands.

Our figures suggest that 28% of people in the East Midlands were feeling squeezed, a statistic decreasing to 14% for over 65s. Interestingly, the least squeezed constituency across the whole UK, Sleaford and North Hykeham, is located in the East Midlands. When contextualising these findings with the Resolution Foundation’s report, 27% of workers in the East Midlands were earning less than the Living Wage2, compared to the UK wide figure of 23%.

 

Signs of financial difficulty in the East Midlands

The figures below are taken from our Consumer Insight Tracker data on financial difficulty and demonstrate how those experiencing financial squeeze sought to reduce the pressure.

These results suggest that people living in the East Midlands were more likely to rely on cutting back as a means of addressing financial difficulty than the UK average (29% compared to 23%).

Note: These are proportions for those experiencing at least one form of financial difficulty, not overall prevalence.

1. The Financial Distress Index estimates the extent to which the households in an area are experiencing financial difficulty relative to all other areas. Areas are ranked out of 100, where 100 is most distressed and 1 is least, and these figures articulate how financially squeezed respondents are feeling.
Which? surveyed 14,138 people between January and December 2018 and asked them about their financial experiences. The most severe financial difficulty they had faced in the past month determined their 'Financial Squeeze' group.
Estimates of financial distress were then calculated for each 2011 Output Area Classification group, then extrapolated down to individual output areas. Averages at the higher level geographies were calculated and weighted by Census 2011 household population estimates.
Please note these statistics are estimates, and are not directly measured from the survey.

2. By Living Wage, we refer to the voluntary rate set by the Living Wage Foundation as a minimum standard to cover living costs rather than the government's compulsory 'National Living Wage’. At the time of writing, UK rates are £9/hr and £10.55/hr in London.

Financial difficulty by constituency

We used our Consumer Insight Tracker data on financial difficulty, together with the ONS’s 2011 Output Area Classification data to estimate the extent to which households in each constituency and region were experiencing financial squeeze relative to other areas. We also sought to understand whether the trends of financial strain could be explained by the financial realities of people living in the East Midlands, by analysing the figures for median earnings and loan data provided by the ONS3 and UK Finance4 respectively.

In this region, the median figure for annual earnings was £22,480 compared to £29,574 for the UK as a whole, while the proportion of loans to average earnings was 4%, compared to 3.9% for the UK as a whole.

 

Our analysis shows that Leicester East, Nottingham East and Leicester South all appear in both the rankings for lowest median earnings and the highest prevalence of financial difficulty, suggesting that earnings do impact the extent to which consumers were feeling squeezed in this region. However, according to Which?’s data on financial squeeze, rural areas like Sleaford and North Hykeham and Mid Derbyshire were the least likely to report financial difficulty which suggests that, in addition to monetary earnings, other factors like the pressures associated with urban living (such as higher costs of goods and services) impact on residents’ experience of financial difficulty. This explains why all of the most squeezed constituencies are located in the East Midlands’ largest cities.

3. ONS ASHE annual gross earnings 2018 (interim)

4. UK Finance data on outstanding £ values of personal loans by postcode sector, aggregated into parliamentary constituencies, Q2, 2018

Key financial difficulty statistics for Westminster Parliamentary Constituencies


Financial difficulty for UK Constituencies in the East Midlands

Hover over an area

Most financial difficulty:

Nottingham East

Hover over an area

Least financial difficulty:

Sleaford and North Hykeham

Hover over an area

Which? campaigns in the East Midlands


Which? campaigns consistently on a number of issues as part of our mission to uncover consumer detriment and push for positive change. As a result of our work, we can share insights into the unique experience of consumers in the East Midlands with both their broadband coverage and the rail service.   

Broadband

As part of our Fix Bad Broadband campaign, we offer consumers a broadband speed-checker tool, inviting people to identify their service speed and enabling us to analyse the consumer experience of broadband connections across the UK.

The UK Government has identified a download speed of 10Mbps as the minimum speed required to fully participate in digital society. The new broadband Universal Service Obligation (USO) will provide consumers with a legal right to request a broadband connection with a download speed of at least 10Mbps5. Ofcom has responsibility for implementing the USO, and it should be in place by 2020.

Our map of best and worst coverage, paints a general picture of those living closer to cities, such as Sherwood and Gedling receiving better coverage, while rural locations like the Derbyshire Dales receiving significantly poorer coverage.

Proportion of consumer broadband speed tests achieving 10Mbps or above

Rail

Which? publishes an annual Rail Satisfaction Survey, a poll that seeks consumer insight on a range of factors affecting their train travel, from punctuality to seat availability which contribute to an overall customer score6.

For train operating companies providing services in the East Midlands, our survey yielded a customer score of 62% for Hull Trains, followed by 58% for London Northwestern and 55% for East Midlands Trains. Of providers serving the East Midlands, Thameslink came bottom with a score of 36%. Furthermore, data available from the Office of Rail and Road (ORR) gives insight into the range of train cancellations for consumers in the East Midlands. 3.6% of CrossCountry trains were cancelled in 2017/2018, compared to 1.8% of East Midlands Trains.

In addition to our Rail Satisfaction Survey, in 2018 Which? also undertook an analysis of two months of rail regulator data and found that fewer than half of rail passengers were satisfied with how their complaints were dealt with by train companies. Of the train operating companies who provide services within the East Midlands, 49% of CrossCountry passengers were satisfied with how their complaint was handled, compared to 21% of LNER passengers, which evidences how different train companies serving the same region are providing complaints handling experiences of vastly differing qualities.

Both the cancellation rates set out by the ORR and our data on satisfaction with complaints handling explain how the rail industry still has some way to go in recognising passengers as consumers, as we called for in our super-complaint of 2015. This is why we will continue to champion improvements in consumer experience through our Train Pain campaign.

To find out more, visit our Consumer Insight page at consumerinsight.which.co.uk, where you can access our latest research on a range of issues, and detailed data on consumer attitudes, perceptions and concerns broken down to the constituency level across the UK.

5. The minimum technical standard for connections made under the USO will be: minimum download speed of 10Mbps; minimum upload speed of 1Mbps; additional quality parameters: medium response times, a minimum data cap pf 100GB and a contention rate of 50:1 (i.e. a maximum of 50 users share one bandwidth)

6. The customer score is based on satisfaction with the brand and likelihood to recommend. Satisfaction and recommendation contribute 50% each to the overall customer score, and a respondent must answer both questions for their answers to contribute towards a customer score. For both satisfaction and recommendation, we apply a weighting to each response.