A comprehensive view of consumers from the North East using Which?'s consumer insight tracker and other data sources.
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.
These reports also highlight how the insights we gain from consumers can inform our campaigning. The statistics about connectivity and rail show us the problems people face in different areas of the country, and so it’s no coincidence that we also have major campaigns on these issues to try and make things better for consumers.
This work has been done against a backdrop of potential change with the uncertainty around Brexit a likely influence on political, social and economic landscapes. This may be particularly prominent in Northern Ireland and could have filtered into consumers’ financial perceptions, spending expectations and their level of trust in certain industries.
In 2018, greater transport powers were devolved from Whitehall to some parts of the UK, resulting in the creation of Transport for Wales, which now which now manages rail services across Wales and West England. At the regional level, this devolution led to the establishment of Transport for the North, England's first sub-national Transport Body, empowered to drive strategic transport improvements. Last year the Scottish Government also placed greater focus on consumer need, launching a consultation on the establishment of a new consumer body for Scotland in July.
We continue to build on our insights to deepen our understanding of what consumers want and need, to allow us to prioritise the areas that matter most to them. As well as being fundamental to our understanding of consumer behaviours and feelings, the insights are valuable to all organisations working across the UK who have the power to make things better for their customers. So they are an important tool for our members, supporters, policy makers and businesses alike.
This set of reports are a fine example of how our mission to make consumers more powerful drives everything we do – and always will.
Which? is the largest consumer organisation in the UK with over 1.3 million members and supporters, more than 40,000 of whom are based in the North East. 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.
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 in each region of the UK. This report is based on a sample of 1,008 respondents from the North East.
We have supplemented our own data with figures from other organisations to present a more comprehensive comparison between the trends identified in our consumer tracker data and the facts around earnings, economic growth and unemployment. 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).
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 North East, 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 71% of people living in the North East were happy with their standard of living, while 51% were satisfied with their income. These figures were broadly reflective of the UK-wide averages. Beyond these headline indicators of financial contentedness, Which? also asked people in the North East to describe their financial situation. 49% responded that this was good, while a fifth (21%) said it was poor.
Respondents were similarly asked to predict whether their finances would get better or worse in the year ahead. Interestingly, across the UK as a whole, we found that the proportion of people who expect their finances to improve in the year ahead was similar to that of those who expected their position to worsen. The North East imitates this trend, with 24% expecting their situation would get worse and 26% expecting it to improve.
We have broken down our statistics on satisfaction by age, which revealed more granular trends of financial optimism and pessimism for the North East. For example, a third (33%) of people aged 30-49 felt their current financial situation to be poor, significantly more than the region’s average of 21%, while nearly half (46%) of 18-29 year olds in this region thought that their financial situation would improve in the year ahead. This suggests that the younger demographic were far more optimistic about where their finances will be in a year’s time.
Our research also examined how people in the North East felt about the UK economy as a whole. Where 44% stated that the national economy was poor, half (53%) of respondents expected that it would get worse in the next 12 months, a proportion marginally greater than the UK average of 49%. This illustrates the fact that people living in the North East were more optimistic about the future of their own finances than they were toward those of the UK as a whole. This tendency was evidenced across the UK, suggesting that consumers do not necessarily equate a deteriorating national economy with an impact on their personal finances.
Our survey also sought to unpick the expectations held by consumers in the North East in relation to how they believed their spending might change in the year ahead. A third (36%) thought that they would be spending more on energy, while 30% thought that they would pay more to run their cars. A quarter of consumers in the North East intended to spend less on socialising and eating out (25%), and a fifth were looking to spend less on alcohol (19%), perhaps as a means of balancing their higher outgoings on more essential commodities like gas and electric.
Beyond spending intentions, we also asked consumers in the North East how worried they were about the cost and delivery of essential commodities, services and events. Fuel prices (69%), public spending cuts (65%) and energy prices (64%) were the areas the most consumers worried. At the other end of the scale, a quarter (25%) of consumers were worried about the price of clothes and 29% were worried about the cost of electrical goods. This research ties in closely to the questions that Which? asked around trust, revealing that in the North East, water was the industry that the greatest proportion of consumers would trust to act in their interest (61%).
Across our Consumer Insight Report for the North East , we have 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 North East economy as a foundation for our analysis. The unemployment rate in this region at the end of 2018 was the highest across the UK at 5.4%, closely followed by Yorkshire and the Humber and the West Midlands at 5.2%.All figures were above the UK average of 4%. Similarly, the growth rate of the economy in the North East was 1% in 2018, lower than the UK’s 1.4%. However, despite the poorer performance of the economy in this region, many of the perceptions and trends identified in this report reflect those of the average UK consumer.
Half (49%) of people living in the North East felt that their financial situation was ‘good’, identical to the UK figure of 49%. Interestingly, the proportion of respondents who said that they expected their financial situation to improve (26%) was similar to that for those who thought it would worsen (24%), suggesting that financial outlook for the region mirrors the trend of the UK as a whole, where expectations were also divided. However, the proportion of people who thought that the UK economy would improve in the year ahead was smaller in the North East than across the UK as a whole (13% compared to 18%), while the proportion who thought the economy would worsen was greater (43% to 39%).
When breaking the results down by age, more granular trends of pessimism emerged for the North East. For example, a third (33%) of people aged 30-49 believed their current financial situation to be poor, while nearly half (46%) of 18-29 year olds in this region thought that their financial situation would improve in the year ahead.
Note: Does not sum to 100% due to the exclusion of ‘neither’ and ‘don’t know’
Establishing the spending habits of consumers in the North East 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 costs and spending in the North East. These statistics reveal that consumer expenditure in the North East averaged £527 a week, significantly less than the UK average figure of £647, while prices were on average 1.2% lower than the UK as a whole.
Interestingly, for the region the figure for median earnings was 9% lower than the UK median (£21,856 compared to £24,006), suggesting that the lower level of weekly expenditure could be somewhat explained by the lower level of earnings, along with the lower costs identified by the ONS.
Which? analysis reveals that on average, households in the North East spent around 28% of all their expenditure on housing, utilities and communication, 13% on transport, 32% on groceries, goods and services and 21% on recreation. When looking at the actual monetary outgoings recorded by consumers in the North East, it appears that people living here were spending less than the UK average on all key outgoings.
When breaking down spending on housing further, average weekly expenditure on rent in the North East was £60.29, compared to a UK average of £113.85 and the London figure of £192.80. Similarly, the average amount that consumers in the North East pay into savings each week (£26.56) was on average half as much as the UK-wide figure of £53.25.
We asked consumers in the North East 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 in areas like public transport and housing, a quarter (25%) were expecting to reduce their spending on socialising, eating out and takeaways.
Energy was the commodity that the largest proportion of consumers said they were expecting to increase their spending on (36%), followed by the cost of running a car (30%). Breaking down this data by demographic, more over 65s were likely to increase their spending on energy (50%) compared to 23% of 18-29 year olds. The disparity here might stem from the fact that 40% of this younger group were in some form of rental agreement and therefore could have less control over their energy expenditure than the 69% of over 65s who own their own homes and can control their energy usage.
Interestingly, two areas where a significant proportion of consumers were likely to keep their spending the same were mobile phone payments (83%) and broadband (78%). 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.
The trends identified in the North East match those of the average UK consumer when it comes to identifying the most likely areas that consumers were expecting to spend both more and less in the year ahead.
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 North East 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) and 73% trusting the NHS. This trend was mirrored by those living in the North East, where four fifths (78%) said they trust GPs, and 77% trust hospitals and the NHS. However, this trust in the healthcare system did not extend to social care, where just a quarter (26%) thought that this sector could be trusted to work in the consumer interest, reducing to just one in five (19%) amongst over 65s.
We also found that 61% of people in the North East trusted the Water industry and 58% trust the food and groceries sector above all other private industries, with car dealerships (9%) and estate agents (12%) the industries trusted by the least. 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:
Our findings around trust are interesting as they suggest that (in addition to other factors like price, level of industry regulation, and familiarity with the purchase process) consumers might be less trusting of transactions they make with industries where there is an imbalance of knowledge between the consumer and provider. For example, a car dealer is likely to know far more about the performance and value of a vehicle they are selling than the average consumer, just as an estate agent may know more about a property and the process of renting or buying a home. This is where Which? seeks to provide consumers with the information they need to deal more confidently in these transactions.
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 North East. The figures suggest that the majority of people living here were worried about fuel prices (69%), public spending cuts (65%) and energy prices (64%).
At the other end of the scale, fewer consumers in the North East were concerned over the pricing over more discretionary items. For example a quarter (25%) were worried about the price of clothing. When breaking down the results by demographic, more 18-34 year olds were worried about mortgage rates (56%), a group made up jointly of renters (42%) and homeowners (51%), while 57% of 18-29 year olds were worried about the ease of travelling around Europe.
Top 5 consumer worries in the North East
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 then supplemented our own survey results with the findings of the Resolution Foundation’s ‘Low Pay Britain 2018’ report to identify the extent to which respondents’ experience of feeling financially squeezed forms part of a broader trend of financial difficulty in the North East.
Our figures suggest that more than a quarter (27%) of people in the North East had found themselves in financial difficulty, a statistic decreasing to 10% of over 65s. These figures of financial squeeze were a reflection of the figures for the UK as a whole. When contextualising these findings with the Resolution Foundation’s report, 26% of workers in this region were earning less than the Living Wage2, compared to the UK- wide figure of 23%.
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.
The results for the North East suggest that people here might be less likely to arrange some sort of borrowing (perhaps via a bank loan or from family or friends) than the UK average, however more likely to rely on cutting back as a means of overcoming financial difficulty.
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.
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 North East, by analysing the figures for median earnings and loan data provided by the ONS3 and UK Finance4.
In the North East, the median figure for annual earnings was £21,856 compared to £24,006 for the UK, while the ratio of loans to average earnings was 5%, compared to 3.9% for the UK as a whole.
Our analysis shows that Newcastle upon Tyne Central was both the most squeezed constituency and that with the lowest median figure for annual earnings. Similarly, Stockton South was least financially squeezed, while also enjoying one of the highest median earning figures for the region (£23,364). However, as with the trends across the UK, the pressures associated with urban living (such as the higher cost of goods and services) also look to be impacting the level of financial difficulty experienced by people in the North East, as all of the five most squeezed constituencies were densely populated towns and cities, while those experiencing less financial pressure are located in more rural areas.
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
Financial difficulty for UK Constituencies in the North East
Most financial difficulty:
Newcastle Upon Tyne Central
Least financial difficulty:
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 North East with both their broadband coverage and the rail service.
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 in large towns like Darlington, Middlesbrough and Hartlepool enjoy a better level of coverage than more rural locations like Blaydon and Bishop Auckland, which receive a comparably poorer level of coverage.
Proportion of consumer broadband speed tests achieving 10Mbps or above
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 North East, CrossCountry Trains received the highest customer score of 49%, closely followed by LNER’s 47%, TransPennine Express’s 44% and Northern’s score of 32%. Furthermore, data available from the Office of Rail and Road (ORR) gives insight into the range of train cancellations for consumers in the North East. 5% of TransPennine Express services were cancelled, followed by 3.6% of CrossCountry trains and 3.2% of LNER services.
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 North East, 49% of CrossCountry passengers were satisfied with how their complaint was handled, compared to 21% of TransPennine Express and LNER passengers and just 17% of Northern passengers. These figures evidence 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.