2024
9
UK Consumer Financial Resilience Market Report 2024
2024-05-31T11:01:45+01:00
REPBE4A5314_4708_4654_BE4D_458F54E21CAD
2195
173365
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Report
en_GB
As the UK starts to recover from the cost of living crisis, consumer sentiment is mixed, with a cautious rise in optimism about personal finances contrasting a sustained sense of…

UK Consumer Financial Resilience Market Report 2024

£ 2,195 (Excl.Tax)

Report Summary

As the UK starts to recover from the cost of living crisis, consumer sentiment is mixed, with a cautious rise in optimism about personal finances contrasting a sustained sense of pessimism regarding the wider economy.

Despite inflation falling considerably, sustained higher interest rates pose an ongoing challenge for UK households. Many Brits will see their finances further squeezed as monthly mortgage repayments surge at the end of fixed rate deals.

Addressing the gender gap in financial management through targeted, gender-inclusive financial education and support offers a significant opportunity to enhance female financial resilience.

This report looks at the following areas:

  • The impact of the cost of living on consumer financial resilience
  • Savings and investment product ownership
  • Debt product ownership and comfort with debt levels
  • How consumers manage their finances
  • Consumers confidence in coping with changing circumstances
  • Consumers preferred outlets for discussing financial difficulties
  • Consumers attitudes towards financial resilience

While the recovery from the cost of living crisis is underway, accepting the worst is behind them is proving a challenge for many consumers.

Charlie Landsborough, Financial Services Analyst

Market Definitions

This report covers consumer behaviours and attitudes towards consumer financial resilience. There is no consistent definition of consumer financial resilience in the UK. This report takes a broad view of how consumers would cope if they were to suffer an unexpected or unplanned financial shock and how they plan to ensure that their finances survive a financial shock in the future. This report closely links to other financial services topics, such as financial capability, vulnerability, planning and education.

Table of Contents

  1. Executive Summary

    • Opportunities for Consumer Financial Resilience
    • The recovery has begun but consumers remain pessimistic
    • Financial and mental wellbeing are intertwined
    • The gender gap remains an ongoing issue
    • Market dynamics
    • Inflation is still the key factor affecting consumers’ finances
    • Graph 1: CPI inflation rate, 2021-23
    • Consumers are struggling to accept the worst is truly behind them
    • Graph 2: perception of the state of the cost of living crisis, 2024
    • Brits expect prices to continue to rise
    • Graph 3: consumer expectations for the next year, 2024
    • Interest rates expected to fall in 2024, but borrowing pressures will remain
    • What consumers want and why
    • Cash dominates savings/investments
    • Over half of Brits have some form of debt
    • Graph 4: debt product ownership, 2024
    • Less than a quarter of Brits are uncomfortable with their debt levels
    • Most Brits keep a close eye on their bank balance
    • Graph 5: consumer approaches to managing finances, 2024
    • Brits aren’t confident they could stomach further hikes in living costs
    • UK consumers are hesitant to contact providers about financial difficulty
    • The cost of living crisis has impacted both financial and mental wellbeing
    • Graph 6: attitudes towards financial resilience, 2024
    • Launch activity and innovation
    • Banks commit to supporting communities affected by bank closures
  2. Market Dynamics

    • Macro-economic factors
    • Inflation is still the key factor affecting consumers’ finances
    • Graph 7: CPI inflation rate, 2021-24
    • Consumers are struggling to accept the worst is truly behind them
    • Graph 8: perception of the state of the cost of living crisis, 2024
    • Brits expect prices to continue to rise
    • Graph 9: consumer expectations for the next year, 2024
    • Many Brits will continue to adopt a frugal mindset
    • Graph 10: expected behaviour changes as a result of rising prices, 2024
    • Interest rates expected to fall in 2024, but borrowing pressures will remain
    • Consumer sentiment: the recovery is continuing…
    • Graph 11: the financial wellbeing index, 2016-24
    • …and people feel more confident about their financial prospects
    • Graph 12: the financial confidence index, 2016-24
    • Social, environmental and legal factors
    • The Consumer Duty seeks to foster a more financially resilient population
    • The FCA is reviewing the advice guidance boundary
    • Buy now, pay later set to face new regulations
  3. What Consumers Want and Why

    • Financial situation
    • Most Brits are relatively positive about their finances
    • Graph 13: household financial situation, 2024
    • Cash and investments form the backbone of financial resilience
    • Graph 14: value of cash savings and investments, 2024
    • Consumers’ financial situations and cash savings are closely linked
    • Graph 15: financial situation, by total value of cash savings, 2024
    • Savings and investment product ownership
    • Most Brits own some form of savings product
    • Graph 16: ownership of savings and investment products, 2024
    • Saving takes precedence over investing
    • Opportunity to encourage investing among those with cash to spare
    • Providers need to break down barriers to increase investment participation
    • Gender imbalances in investment participation persist…
    • …even across higher levels of affluence
    • Graph 17: ownership of investments among consumers with £20,000 or more held in cash savings, by gender, 2024
    • Debt product ownership
    • Over half of Brits have some form of outstanding unsecured debt
    • Graph 18: unsecured debt product ownership, 2024
    • Credit card usage rises amid cost of living crisis
    • Graph 19: ownership of credit card debt, by age, 2024
    • Consumers are seeking flexible alternatives to traditional credit
    • Graph 20: ownership of buy now pay later debt, by age, 2024
    • Reluctant borrowers find themselves depending on debt for daily expenses
    • Motivations for borrowing vary depending on financial situation
    • Graph 21: reasons for borrowing money, by financial situation, 2023
    • Comfort with current debt
    • Most Brits feel OK about their debt levels
    • Graph 22: level of comfort with outstanding unsecured debts, 2024
    • Debt comfort levels and financial circumstances are closely interlinked
    • Graph 23: level of comfort with outstanding unsecured debts, by financial situation, 2024
    • Help strugglers seek help
    • The gender confidence gap extends into debt comfort levels
    • Graph 24: level of comfort with outstanding unsecured debts, by gender, 2024
    • Providers need to empower women to confidently manage their debt
    • Managing finances
    • Most Brits keep a close eye on their bank balance…
    • Graph 25: consumers approaches to managing finances, 2024
    • …but consumers tend to adopt a passive approach to managing finances
    • Increased focus on rainy day funds amid the cost of living crisis
    • Younger consumers are embracing digital tools to track spending
    • Graph 26: usage of apps/tools to track spending, by age, 2024
    • Financial resilience in changing circumstances
    • Brits aren’t confident they could stomach further hikes in living costs
    • Graph 27: consumer confidence in withstanding costs/changes in personal circumstances, 2024
    • Widespread concern over mortgage affordability following rate rises
    • Younger consumers are vulnerable to further cost increases
    • Less than half of workers are confident they could afford to be ill
    • Graph 28: confidence affording two months unpaid off work sick, by value of cash savings, 2024
    • Financial concerns continue to hinder family planning
    • Comfort discussing financial difficulty
    • UK consumers are hesitant to contact providers about financial difficulty
    • Graph 29: who consumers feel most comfortable talking to about financial difficulty, 2024
    • Brits prefer discussing financial struggles with loved ones
    • Adults with precarious finances are less inclined to speak to providers
    • Graph 30: comfort discussing financial difficulties, by financial situation, 2024
    • Debt charities need to change perceptions among those struggling
    • Attitudes towards financial resilience
    • The cost of living crisis has impacted both financial and mental wellbeing
    • Graph 31: attitudes towards financial resilience, 2024
    • Half of Brits say the cost of living crisis has significantly damaged finances
    • The road to recovery will be uneven
    • Consumers’ mental wellbeing has been impacted by cost of living crisis
    • Nearly half of Brits anticipate dipping into savings
  4. Launch Activity and Innovation

    • Providers are making it easier for homeowners to make energy efficient changes
    • Banks commit to supporting communities affected by bank closures
    • NatWest says it will support 10 million Brits every year with financial wellbeing
  5. Appendix

    • Report scope and definitions
    • Market definition
    • Abbreviations and terms
    • Methodology
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

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Data

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*databooks not available with UK B2B Industry reports.

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