A comprehensive view of consumers from the West Midlands 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, nearly 95,000 of whom are based in the West 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.
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 1,017 respondents from the West Midlands.
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 West Midlands, offering a snapshot of how consumers feel about their financial future and the trust they have in public services and vital industries like rail and broadband.
Our research shows that 68% of people living in the West Midlands were happy with their standard of living, while 47% 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 West Midlands to describe their financial situation. 48% responded that it was good, while a fifth (22%) said it was poor.
Respondents were similarly asked to predict whether their finances would get better or worse in the year ahead. Interestingly, we found that the proportion of people in the West Midlands who expected their household finances to improve in the next year (27%), was similar to the proportion who expected their financial position to worsen (25%), suggesting that financial optimism in the West Midlands is split. This trend is also the case across the UK.
When breaking the results down by age more granular trends emerge for the West Midlands. For example, 58% of over 65s thought that their household finances were good, compared to 34% of 30-49 year olds. These statistics suggest that consumers in this demographic living in the West Midlands were less optimistic than the UK average, where (49%) said their position was good.
Our research also examined how people living in the West Midlands felt about the UK economy as a whole, with 35% saying the national economy was poor, while 43% expected that it would worsen in the next 12 months. This illustrates the fact that people living in the West Midlands are more optimistic about the future of their own finances than they are toward those of the UK as a whole. This trend is evidenced across the UK, suggesting that consumers do not necessarily equate a deteriorating national economy to an impact on their personal finances.
Our survey also sought to unpick the expectations held by consumers in the West Midlands in relation to how they believe their spending might change in the year ahead. A third (32%) thought they would be spending more on energy, while 31% thought that they would pay more to run their cars. A quarter of consumers in the West Midlands intended to spend less on socialising and eating out (24%), and one in five were planning to pay less into their savings (20%), 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 West Midlands how worried they were about the price and delivery of essential commodities and services. Around a third said they were worried about the cost of fuel (66%), energy prices (65%) and public spending cuts (63%). At the other end of the scale, a fifth (22%) of consumers were worried about the price of clothes and 27% were worried about the cost of electrical goods. This research ties in closely to the questions that Which? asked around trust, revealing that the industry the largest proportion of those in the West Midlands trust to act in the consumer interest was the food and grocery sectors (62% apiece).
Across our Consumer Insight Report for the West Midlands, 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 West Midlands economy as a foundation for our analysis. The unemployment rate in the region at the end of 2018 was 5.2%, meaning it sat above the UK average figure of 4% and near the North East’s high of 5.4%. Similarly, the growth rate evidenced in the West Midlands was also lower in 2018, at 1.1% to the UK-wide 1.4%. However, despite the poorer performance of the economy in this region, many of the perceptions and trends identified in this report reflected those of the average UK consumer.
Half (48%) of people living in the West Midlands felt that their financial situation was good, strikingly similar to the UK figure of 49%, while 22% felt their position to be poor. Interestingly, the proportion of respondents who said that they expected their household’s financial situation to improve (27%) was similar to the figure of those who thought it would worsen (25%). These figures suggest that financial outlook in the West Midlands mirrors that of the UK as a whole.
However, when it came to assessing the condition of the national economy, more people in the West Midlands appeared to be optimistic that performance would improve in the next 12 months compared to the UK average (22% compared to 18% of the UK), while a smaller proportion expected the UK economy to decline (43% to the UK’s 49%).
When breaking the results down by age more granular trends emerge for the West Midlands. For example, 58% of over 65s thought that their finances were good, compared to 34% of 30-49 year olds. These statistics suggest that consumers in this demographic living in the West Midlands are less optimistic than the UK average, where (49%) thought their position was good.
Note: Does not sum to 100% due to the exclusion of ‘neither’ and ‘don’t know’
Establishing the spending habits of consumers in the West Midlands is 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 West Midlands. These statistics reveal that consumer expenditure in the West Midlands averaged £562 a week, well below the UK average figure of £647, while prices were on average 1.5% lower than the UK as a whole.
These figures suggest that the weekly expenditure of households in the West Midlands was around 13% lower than the UK average, despite the prices of goods, services, rental and housing being only 1.5% lower. This further disparity in outgoings could be partially explained by an analysis of median earnings data, which for the West Midlands was £22,753 compared to £24,006 for the UK as a whole, meaning that earnings were around 5% lower in the region.
Further Which? analysis reveals that on average, households in the West Midlands spent around 30% of all their expenditure on housing, utilities and communication, 14% on transport, 31% on groceries, goods and services and 19% on recreation. When looking at the actual monetary outgoings recorded by consumers in the West Midlands, it appears that people living here were spending less than the average UK consumer on all four categories of essential expenditure, with spending on recreation and groceries noticeably lower.
When breaking down spending on housing further, average weekly expenditure on rent in the West Midlands was £95.86, compared to a UK average of £113.85 and the London figure of £192.80.
We asked consumers in the West Midlands how likely they were to increase or decrease their expenditure on certain goods and services 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, 24% were expecting to reduce their spending on socialising, eating out and takeaways.
The costs associated with energy are those where consumers said they expected to spend more in the next few months (32%). This is closely followed by those expecting to spend more on running a car (31%) and groceries (29%). Breaking down this data by demographic, more over 65s said they were likely to increase their spending on energy (41%) and TV packages (24%), compared to the West Midlands average of 15%.
Interestingly, two areas where a large proportion of consumers were likely to keep their spending the same are mobile phone payments (81%) and broadband (77%). 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 West Midlands matched 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 West 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, as 75% of people said they trusted their general practitioner (GP) and 73% saying this of the NHS. This trend is mirrored by those living in the West Midlands, where three quarters trust GPs (75%), while seven in ten trusted hospitals (70%) and the NHS (70%). However, this trust in the healthcare system did not extend to social care, where just a quarter (23%) thought that this sector could be trusted to work in the consumer interest. Just one in five (18%) of over 65s said they trust social care.
When assessing the level of trust in industries, we found that 62% of people in the West Midlands said they trust the food and water sectors to act in the best interests of consumers. Conversely, car dealerships (7%) and estate agents (9%) were trusted by the smallest proportion. This cynicism toward the car market is shared by the UK as a whole, as just 9% thought that this sector was worthy of 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 West Midlands. The figures suggest that the majority of people living here were worried about fuel prices (66%), energy prices (65%) and public spending cuts (63%). At the other end of the scale, fewer consumers in the West Midlands were concerned over the pricing of more discretionary items. For example a quarter (22%) were worried about the price of clothing.
When breaking down the results by demographic, more over 65s were worried about public spending cuts (71%) and savings interest rates (65%) than the average in the region (63% and 55%), while worry over household level of debt peaked in the 30-49 age group (49%), as did worry over mortgage levels (55%) and future tax levels (61%). This is a group where three in five (61%) are homeowners, two in five (38%) rent, and half (52%) have a child under the age of 18, meaning the figures around financial worry may therefore reflect the pressures on this demographic.
Top 5 consumer worries in the West Midlands
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 West Midlands.
Our figures suggest that 27% of people in the West Midlands were feeling squeezed, a statistic decreasing to 10% of over 65s. These trends of distress are a reflection of the figures for the UK as a whole. When contextualising these findings with the Resolution Foundation’s report, a quarter (27%) of workers in the West Midlands 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.
These results suggest that people living in the West Midlands might be more likely to default on a loan or bill or resort to an unauthorised overdraft or payday loan 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 West 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 is £22,753 compared to £29,574 for the UK as a whole, while the proportion of loans to average earnings is 4.5%, compared to 3.9% for the UK as a whole.
Our analysis shows that just two of the constituencies with the lowest earnings (Birmingham, Hodge Hill and Warely) also appear in our rankings of greatest financial squeeze, suggesting that although earnings data might provide a good barometer of financial position, other factors also influence the extent of financial pressure that people experience. For example, four of the most squeezed constituencies were based in Birmingham, the largest city in the region, while the least squeezed (Kenilworth and Southham, Bromsgrove and Stone) were located in more rural areas comprised of villages. This suggests that geography and urban pressures (such as the potential of higher costs of goods and services) can exacerbate people’s experience of financial difficulty.
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 West Midlands
Most financial difficulty:
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 West Midlands 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 cities and large towns like Stafford and Birmingham enjoying better minimum speeds than those in rural locations like North Hertfordshire and Shropshire.
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 West Midlands, our survey yielded a customer score of 58% for both London Northwestern and Chiltern Railway, closely followed by Virgin Trains West Coast at 57%, West Midlands Railway with 52%, CrossCountry Trains 49% and lastly Great Western Railways with 47%. Furthermore, data available from the Office of Rail and Road (ORR) gives insight into the range of train cancellations for consumers in the West Midlands. Chiltern Railway had a cancellation rate of 1.5% in 2017/2018 which was the lowest for the region, followed by West Midlands Trains with 3.5% and CrossCountry and Virgin Trains with 3.6%.
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 West Midlands, 49% of CrossCountry passengers were satisfied with how their complaint was handled, nearly matched by Chiltern Railways, where 48% of passengers were content with the process. The complaints handling experience offered by West Midlands Trains was found satisfactory by 41% of passengers, while just 17% of Great Western Railway passengers were content with their experience. The range of figures demonstrated here 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.