New research has revealed the devastating impact the cost-of-living crisis is having on consumer happiness.
The Which? insight tracker shows satisfaction with living standards and income has crashed to its lowest point since 2014.
Just over half of consumers are satisfied with their standards of living (55%). Even fewer are content with their household income (39%) and savings (34%).
With inflation at a 40-year high, driving the fastest real-terms fall in pay on record, confidence in household finances has plunged to the level it was at the start of the pandemic.
Worse to come
This downward trend is expected to continue after huge increases to the energy price cap and hundreds of pounds being added to annual food bills.
The situation has left households feeling very pessimistic about their future finances and the prospects of the economy, with dire net confidence scores of -40 and -60, respectively.
It is also reflected in concern levels, with 93% of consumers telling Which? they are worried about energy prices.
The missed payment rate fell slightly this month, but it is high for this time of year.
Which?’s tracker showed around 6.8% of households in the UK – an estimated 1.9 million – has missed or defaulted on at least one mortgage, rent, loan, credit card or other bill during August. The comparable estimate for August 2021 was 4.5%.
The survey also found the number of people in financial difficulty has stayed at consistently high levels. Six in 10 (59%) consumers said their household has had to make an adjustment – such as cutting back on shopping, dipping into savings or borrowing – to cover essential spending during the past month.
This is a significant increase on the 40% seen just a year ago before the cost of living began to rocket.
‘Eye-watering hikes’
Which? policy and advocacy director Rocio Concha said: “It was meant to be the year that we moved on from Covid, but the cost-of-living crisis has left consumer confidence in ruins.
“Household finances are at breaking point and many consumers will simply not be able to afford the eye-watering upcoming hikes in their energy bills.
It was meant to be the year that we moved on from Covid.”
Rocio Concha, Which?
She added: “The government must move quickly to increase the amount of financial support it is providing to families and households who are struggling.
“Tackling the cost-of-living crisis must be at the top of the new prime minister’s in-tray. Businesses should also do everything in their power to make sure customers are getting a good deal and those facing serious financial hardship are protected.”
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