Foreword


Which? is the UK’s consumer champion, a powerful force for good, here to make life simpler, fairer and safer for everyone.

In 2022, as we adapt to living with Covid-19, and face the highest inflation rate for 30 years, consumers are experiencing an evolving range of challenges. The vast majority of consumers in Wales are worried about energy, fuel and food price increases, and one in 14 missed a housing, bill or credit payment in late 2021. Things are only expected to get tougher for households in the months ahead. At Which?, a key part of our work is to explore and understand the issues that people are facing in their daily lives, so we can support them, and find policy solutions to today’s biggest consumer problems.

We know that consumer experiences vary across the UK, particularly in the devolved nations where challenges and policy priorities are often different. Policymakers need tailored and specific insight to meet the needs of their constituents. In this report, we explore the experiences of consumers in Wales in detail, offering cutting edge insight into the challenges they face today and the shifts they are making towards greater digitalisation and sustainable consumption.

Executive Summary


The start of 2022 has marked a transition in which economic concerns are replacing Covid-19 health worries as the predominant issue for many people in Wales and the rest of the UK. Despite the emergence of the highly transmissible Omicron variant of Covid-19, the reduced severity of infections means that focus is switching to a new set of challenges and our report this year starts by focussing on two immediate crises.

The first is a cost of living crisis as higher prices, especially for energy, are squeezing households. Inflation rose sharply by the end of 2021 and the annual rate reached 6.2% in February, the highest it has been since March 1992. Further price rises are still to come as the energy price cap for default tariffs will increase by 54% in April, while the Bank of England expects inflation to increase to around 8% this Spring and it may rise even higher later in the year as a result of added economic pressures caused by Russia’s invasion of Ukraine.

Consumer finances and the ‘cost of living’ crisis


Rising prices and the resulting cost of living crisis are clearly reflected in the concerns of consumers in Wales. Energy price rises have attracted most attention and an overwhelming majority of consumers in Wales (83%) said they were worried about these, a huge increase on the 57% who were worried last year. Concern about fuel and food prices is also very high (79% and 75% respectively), again a major increase on the figures last year.

Concern about housing costs has also increased since last year (from 46% to 55%), although to a lesser extent than energy, fuel and food prices. However, renters are much more likely to be worried about housing costs than homeowners. Three quarters (75%) of renters in our sample of consumers in Wales were worried about this, compared to 48% of homeowners.

Some consumers are already being affected by higher prices. Six in ten (61%) told us they had noticed higher food prices, and over half (53%) had experienced an increase in the price they pay for energy. Roughly one in six (16%) consumers in Wales reported that their energy company had gone bust.

 

To offset the impact of higher energy prices, nearly half (48%) of people said that they had put the heating on less, whilst 39% had reduced their use of lights and appliances around the home.

Many consumers in Wales who had experienced higher food prices also reported adapting their behaviour by buying extra items when on promotion (41%), buying cheaper alternative products (44%) or cheaper brands (43%), or by shopping around in different supermarkets, stores or online shops (41%). Just over one in ten (13%) said they had gone so far as to skip meals or prioritise meals for other family members (9%). People aged over 65 were the least likely to have made such adjustments.

 

Further price rises are still to come as the energy price cap for default tariffs will increase by 54% in April and the Bank of England estimates that inflation will rise to around 7% in the spring.

The rising price of essentials will have a sizable and unavoidable impact on household budgets. We estimate that the share of household expenditure that is spent on food and energy in Wales will be 20.9% in April 2022. This is an increase of 2.3 percentage points compared with the pre-pandemic share of 18.6%.

In absolute terms, this means that consumers in Wales are predicted to spend an additional £19.24 per week on food and energy in April 2022 compared to March 2020. This amounts to over £1,000 extra per year.

These average increases disguise the fact that some households will be much worse affected by the increase in inflation. Higher rates of inflation for essential products are particularly problematic for lower income households because these households will typically have tighter budgets and it is harder to avoid price rises on essential products.

Our analysis of inflation rates by household income at a UK level estimates that the share of household expenditure that is spent just on food and energy will increase by 3.1 percentage points for those on the lowest incomes, but by just 1.4 percentage points for those on the highest incomes.

This means that for households with the lowest 20% of incomes, averaging just £14,600 per year, 27.8% of their spending will be on just food, gas and electricity by April 2022. For those in the next lowest 20%, with average incomes of £24,000, this will be 24.5% of their spending. By comparison, for the 20% of households with the highest incomes, an average of £81,000 per year, this is estimated to be just 14.4%.

These forecasts are a stark warning of the potential financial difficulty to come for many households and this is particularly concerning since there were already indications that financial difficulty levels are higher in Wales at the end of 2021 compared to in 2020. The proportion who reported having missed or defaulted on at least one mortgage, rent, loan, credit card or bill payment increased from 5.8% at the end of 2020 to 7.4% at the end of 2021. This is slightly but not significantly higher than the 6% missed payment rate in England. Households in the sample on lower incomes (up to £21,000) are more likely to report missing payments than those not on a lower income.

With financial pressures set to increase during 2022 as prices increase further, households’ ability to manage will depend on whether they have a financial buffer to cope with increased bills. However, our research suggests that many households have low levels of financial resilience. Almost a third of people (32%) in Wales said they would not be able to pay an unexpected bill of £300 either through their regular income or by dipping into savings. Most of these would either borrow money or cut back on essentials to cover such a bill, but 8% said they would not be able to pay it at all and this rose to 20% of those with a household income of £21,000 or less.

It is clear that many households are going to need substantial support in the coming months. This needs to reach those that are most vulnerable and support people in the short term as they deal with price cap changes and higher energy bills. In addition to the direct support provided by the Welsh government through the Household Support Fund and additional support recently announced for some more vulnerable consumers, regulators and companies need to make sure they are ready to support customers in financial distress and treat their customers fairly.

83% of consumers in Wales are worried about energy prices, 79% are worried about fuel prices and 75% are worried about food prices.
83%
of consumers are worried about energy prices

A fraud epidemic


The cost of living crisis has grabbed headlines, but a second crisis has developed over the course of the pandemic which is causing severe harm for consumers. There has been a sharp rise in the incidence of fraud and scams with fraudsters taking advantage of consumers’ changing habits. Estimates from the Telephone-operated Crime Survey for England and Wales (TCSEW) showed that there was a 36% increase in fraud offences in the year ending September 2021 compared with the year ending September 2019.

Most of these offences take place online and the substantial increase in fraud during the pandemic has been enabled by changes in consumer behaviour, such as increased online shopping, while digital technologies such as social media platforms have allowed fraudsters to target potential victims en masse through fake advertising. The ONS estimates that consumer and retail fraud, which includes the sale of fake or counterfeit products, increased by 73% in this period.

In Wales specifically, there were an estimated 212,000 incidents of fraud in the year ending June 2021 according to data from the TCSEW. This translates as 86 cases per 1,000 people in Wales, or an incidence rate of 8.6%. More than half of these incidents (108,000) were bank and credit account frauds, which includes fraudulent access to bank, building society or credit card accounts or fraudulent use of plastic card details. The next most common type of fraud, with 67,000 incidents, was consumer and retail fraud which is when goods or services are made using fraudulent means, when goods or services were paid for, but failed to materialise, were misrepresented at point of sale, or are faulty or stolen.

 

Although fraud is a financial crime, the impact goes beyond the financial losses and into psychological harm – victims of scams commonly report feelings of irritation, anger or sadness, and some also experience impacts on their mental or physical health. Which? is concerned that the full scale of this psychological harm has long been underestimated and so we recently explored the relationship between being a victim of fraud and reduced wellbeing. Using HM Treasury valuation techniques and data from the Crime Survey for England and Wales, we estimate the loss in wellbeing from being a victim of a fraud is worth £2,509 on average. Aggregated across the 212,000 incidents of fraud, this gives an annual estimated value from the loss of wellbeing due to fraud in Wales of approximately £530 million.

In Wales specifically, there were an estimated 212,000 incidents of fraud in the year ending June 2021 according to data from the TCSEW.
212000
incidents of fraud

The prevalence of fraudulent activity also has an effect beyond those who become victims. It causes worry and anxiety, and forces people to take action to keep themselves safe. Three quarters (75%) of consumers in Wales told us they have seen or been targeted by a scam. People were most likely to believe they had been targeted by fraudsters via email (54%), texts (50%) and calls (50%).

Approximately one in eight people say that they have seen or been targeted by a scam on social media or at a shopping website. Although Which? has found widespread evidence of scams in these contexts, they can be harder for consumers to detect than through direct communications as people may be less alert to fraudulent content. For example, our research has shown that Facebook users have limited awareness about the risk of scams on social media and, when tested, they mistakenly assume they can spot fraudulent content.

The likelihood of having seen a scam was fairly consistent across different demographic groups in our sample, but the medium through which consumers in Wales were targeted did differ across age groups. Older age groups are more likely to see scams via email compared to 18–34 year-olds. Those over the age of 65 were also more likely to have experienced scam calls. Conversely, 18–34 year-olds are more likely to see scams on social media or via text than those aged 65+.

In addition to the various channels that scams may come through, there is also an enormous breadth of types of scams such as bank and credit account fraud, fake products, investment scams, and romance scams. With so many ways and means for scammers to operate, consumers rely on a wide range of organisations to take action to help protect them.

 

We asked consumers in Wales how satisfied they are that these different entities act sufficiently to protect them from scams. Just over half of consumers in Wales are satisfied that banks protect consumers from scams, maybe reflecting that many banks have acted visibly against fraud by proactively issuing warnings to customers or implementing new measures, such as confirmation of payee, to prevent fraudulent transactions. However, 17% still don’t think that banks are doing enough, and there has been criticism that banks have been inconsistent in reimbursing fraud victims, resulting in the Financial Ombudsman finding in the favour of customers in a large majority of fraud complaints.

Satisfaction with the government is low, with just 23% of people in Wales being satisfied that they do enough to protect consumers from scams. However, the greatest levels of dissatisfaction are reserved for online platforms such as social media and search engines. Just 19% of people are satisfied with their actions to protect consumers and 40% are dissatisfied. These findings were consistent across all the UK nations.

With the incidence of frauds surging during the pandemic, consumers in Wales evidently believe that they should receive better protection against scams and this needs to come from a number of organisations.

An essential action is to make the online world safer. Which? has been calling on the UK government to legislate to help protect consumers from the harm associated with scams by amending the Online Safety Bill to give online platforms a legal duty to protect consumers from fraud and for paid-for advertising to be included in the scope of the Bill. These adverts are a critical way consumers are targeted by fraudsters online and we therefore strongly welcome the government's intentions to amend the Bill.

Digital life and broadband connectivity


Year on year, more of our lives are conducted online and the pandemic hastened the speed at which we’ve adopted online behaviours. Last year, we reported an increase in the use of home broadband for various activities during the pandemic, including shopping, banking, working from home and communicating with friends and family. Our research indicates that these habits have stuck even as Covid-19 restrictions have eased.

Three-fifths of consumers in Wales told us they often use their home broadband for administrative activities, such as banking, and the same proportion for communication with friends and family. Only 2% said they never use their home broadband for online shopping. Frequency of usage did not change significantly in any category compared to last year.

As internet usage in Wales spreads to more and more areas of daily life, consumers also have many devices connected to their home broadband. Predictably, most reported having mobile phones and computers connected to their home broadband. But many people also had other connected devices, with 63% having a smart TV, 58% a tablet or ereader, and 36% a speaker or virtual assistant. Ownership of connected devices varied across age groups. Though mobile phones and smart speakers / virtual assistants were more commonly owned by younger consumers, older consumers were more likely to have a tablet or e-reader and the 30–49 age group were most likely to have a smart TV.

 

It is clear that consumers in Wales rely on their home broadband for various essential tasks, and this reliance is likely to increase further in the future, with more and more broadband-connected devices becoming a part of households across the nation. As such, it is increasingly crucial that consumers have access to good broadband, with sufficient bandwidth and speed to complete this broad range of activities.

Which? has analysed Ofcom data to reveal the performance of broadband within the devolved nations of the UK. Our analysis shows that despite improved broadband performance across the UK, average broadband speeds in Wales are still much slower than in the other nations.

England has the fastest average fixed broadband download speed of 88.5 megabits per second (Mbps). This is a little faster than in Northern Ireland (82.7 Mbps) and Scotland (73.7 Mbps). However, the average broadband speed in Wales is much slower at just 55.9 Mbps. Our survey data shows an equal usage of, and need for, good broadband in Wales, but households in Wales have substantially inferior connection performance than elsewhere in the UK.

Beyond the slower overall broadband performance in Wales compared to the other nations, deeper analysis of the data also shows clearly that performance is not equal across areas within Wales.

There are stark differences between the largest urban areas and the rest of the country. On average, the download line speeds in Cardiff and Swansea cities are more than twice as fast as those in the northern and central regions of Wales. Households in and around Newport see broadband performance somewhere between these extremes. Most households in Cardiff, Swansea and Newport have fixed broadband connections performing at between 64 and 128 Mbps; the majority of those in the rest of Wales are between 32 and 64 Mbps.

Differences in performance speeds represent both differences in network capability and in household demand for faster broadband, so an area with relatively low average speeds may have less access to superfast broadband, more households buying broadband packages below the available speed, or both.

The UK government has committed to enhance digital connectivity so that gigabit-capable broadband with download speeds of at least 1,000 mbps will be available nationwide by 2030. It is also forecasting that at least 70% of premises in Wales will be covered by gigabit-capable broadband by 2025. This would mean Wales catching up with some other parts of the UK, but it would still lag well behind London and Northern Ireland for which the forecast rate is at least 90% of premises.

Sustainable consumption


The past year has been a key period in the move to tackle climate change. The UK was the host of the 2021 UN Climate Change Conference (COP 26) in Glasgow. The UK’s Climate Change Committee (CCC) made it clear in its most recent risk assessment that adaptation action has failed to keep pace with the worsening reality of climate risk.19 Far more ambitious action is therefore needed if the government is to mitigate the impacts and achieve its commitments to reach net zero by 2050 and this action will need to include widespread behaviour change by consumers.

Climate change is a concern for most people in Wales. Two-fifths (40%) told us they are very concerned about climate change and another 40% said they are somewhat concerned. This was very similar across the nations, though consumers in Northern Ireland were slightly less likely to be very concerned (36%). Just 6% of people in Wales are not at all concerned. This high level of concern was consistent across age groups. Our data also shows that a similar proportion of people in Wales believe they have some personal responsibility to reduce their own carbon footprint – 83% feel they are very or somewhat responsible.

Further, the proportion of consumers in Wales who reported having made a sustainable purchasing decision has increased compared to last year. Those concerned about climate change were most likely to have made a decision influenced by environmental concerns when buying electrical appliances (49%) and this is an 8 percentage point increase on last year. There were also large increases this year in the proportions of people who told us they had made a sustainable choice around transport and energy.

Choosing more sustainably can be harder for purchases like vehicles and holidays where it might mean paying more or making lifestyle compromises. However, even for these categories a greater proportion of consumers in Wales reported making sustainable choices.

 

The increase in the proportion of people making a more sustainable vehicle purchasing decision is particularly welcome since one of the key goals for reducing carbon consumption through consumer behaviour is to increase the use of electric vehicles (EVs), as opposed to petrol or diesel which will be banned from sale after 2030.

Achieving this goal will require a rapid change in purchasing habits, since only 2% of consumers in Wales told us they already own an electric vehicle. This rate is consistent with the rest of the UK, with the only exceptions being higher uptake in large urban centres (particularly London).

Although current ownership is low, two-fifths (40%) of car owners in Wales expressed an intention to buy an electric vehicle in the future. However, that still leaves a majority unconvinced as 33% said they were not intending to buy an EV, and 24% were unsure.

To empower consumers to purchase EVs, drivers must have confidence that the cars and the charging infrastructure will be able to meet their needs. Our research highlights the range of barriers that consumers in Wales face in the impending switch to EVs.

Access to charge points, either at home or when out and about is the most commonly cited barrier to adoption with 53% of car owners in Wales identifying this. Range anxiety is also a large concern, with 43% of car owners saying that range on a single charge was a problem. To some extent, concerns about range may be overcome with better information. Which? testing data shows that most of the latest EVs have a range of at least 200 miles without recharging, which is likely to be sufficient for most car users most of the time if they have access to charge points at the end of their journey.

Upfront cost is clearly a large barrier to adoption, with a third (33%) of car owners saying this, but the next two most commonly cited barriers to EV adoption again relate to charging, with people being concerned about access to charge points and the time it takes to charge a vehicle. It is therefore clear that consumers will not feel reassured to switch to EVs until these concerns about charging are allayed.

The number of public-access charge points that will be needed will vary between different areas, depending on factors including the availability of off-street parking (and therefore the possibility for home charging) and population density. Nevertheless, the way the rollout is developing means that drivers living and travelling in some parts of the UK are likely to struggle to access the infrastructure they need. There are large differences across the UK nations, with Wales lagging behind Scotland and England. While in Scotland there are 52 public charge points per one hundred thousand people, this compares with 43 in England, 33 in Wales, and just 18 in Northern Ireland.

To give consumers in Wales the confidence to make the switch to an EV, the roll-out of charging infrastructure needs to rapidly accelerate so that every motorist can access the charging infrastructure they need, no matter where they live and travel. We welcome the EV Charging Strategy and Action Plan published last year by the Welsh Government, and look forward to seeing these plans further developed and implemented. In particular, it will be important to address the gaps in provision identified by the Welsh Government in rural and economically disadvantaged areas, as well as in the rapid charging network for long distance travel.

 

Methodology


Which? Quantitative surveys

Yonder, on behalf of Which? conducted a survey of consumers in each of the UK nations from 30th November-8th December 2021. A minimum of 1,000 respondents were recruited for each of the four nations, with quotas and response weighting used to obtain a nationally representative sample for each nation according to their known age and gender profiles. The survey covered consumer sentiment and financial wellbeing, broadband, scams and sustainability.  Sample sizes and question text are noted below the relevant charts throughout the reports. Data from this survey is presented throughout the report, though other data sources are also included, with a different survey used for parts of the sustainability section.