The proportion of people who think their finances will improve over the next three months is rising, according to the latest data from the LV= Wealth and Wellbeing Research Programme.
Some 12% of UK adults say they expect their finances to improve over the next three months – an improvement on the previous quarter when 10% said this.
The proportion of people who think their finances will worsen over the next three months has fallen to 40% (21m) from 46% (25m). The figures are the most optimistic since March 2022.
Clive Bolton, managing director of protection, savings and retirement at LV=, said: “The LV= Wealth and Wellbeing Research Programme has tracked how millions of people have been squeezed financially over the past 12 months as rising energy bills, interest rates and inflation reduce their spending power.
“People’s finances are in a poor state compared to two years ago, but they have begun to gradually improve ¬- a trend that our research identified in December last year.
“Although millions of people are facing a financial squeeze, the proportion of people who think their finances will improve is gradually rising while the proportion who think they will worsen is falling.”
He added: “Our latest data is the most optimistic we’ve seen since March 2022 and confirms the trend of a gradually improving picture.
“This appears consistent with the 0.1% growth in GDP in Q1 2023 announced by the ONS. If the cost of living and inflation ease and wages improve, people could begin to feel more optimistic about their finances.”
The index measuring financial outlook for the next three months was -28 in March 2023 compared to -36 in December 2022.
A negative index means more people think their finance will worsen over the next three months compared to those who think it will improve.
The index has improved by +8 indicating fewer people have a negative outlook compared to the previous quarter. Some 40% (21m) expect their finances to worsen over the next three months while 12% (6m) think it will improve.
LV=’s index measuring people’s finances over the past three months was -42 in March 2023.
The negative index indicates that more people say their finances have got worse over the past three months than those saying their finances have got better.
However, this index has improved compared to December 2022 when the index was -49, indicating finances may be starting to improve for some. 51% (27m) say their finances have deteriorated over the past three months while 9% (5m) said their finances had improved.
The index measuring income fell from 9 to 5, as a smaller proportion of people said their income from work had increased. Many more people (63%/33m) say their outgoings have increased compared to decreased (8%/4m).
