Research from pensions and retirement specialist LV= highlights how 42% (22 million) UK adults say they expect their finances to worsen over the next three months.
The March 2022 figures are the worst they’ve been since June 2020 when the LV= started surveying consumers and highlight how the confidence of UK consumers is falling sharply as millions feel the effects of rising prices.
The LV= Wealth and Wellbeing Monitor - a quarterly survey of 4,000 UK adults – reveals:
- Worsening financial outlook: 42% (22 million) expect their finances to worsen over the next three months
- Deterioration in finances over past three months: 44% (23 million) say their finances have deteriorated over the past three months.
- Outgoings increase: 58% (31 million) say their total monthly outgoings have increased in the last three months
- Saving falls: 23% (12 million) said the amount they are saving has fallen in the last three months
Those in retirement are faring particularly badly…
- 65% say their supermarket spend has increased in the last three months
- 65% say their total monthly outgoings have increased in the last three months
- 46% expect their finances to worsen over next three months
Clive Bolton, managing director of protection, savings & retirement, said: “The results of the latest LV= Wealth and Wellbeing Monitor highlight how the finances of millions of people are being squeezed by the large rise in the cost of living.
“The indices for savings, financial outlook and outgoings are the worst recorded since we started surveying consumers two years ago.
“Consumer sentiment had been steadily improving between spring and early autumn 2021 as the success of the vaccine programme, fall in death rates and easing of lockdown restrictions allowed life to begin to return to normal. However, the sharp rise in the cost of living has caused confidence to fall dramatically
“Rising energy prices are becoming a significant problem for many people, particularly those who are retired. Rising prices coupled with poor returns on deposit accounts will dismay pensioners whose only or main source of retirement income is the State Pension.
“Rising inflation and poor returns from cash present a dilemma for people in retirement. They might have to drawdown their savings more quickly than they would want or switch some of their savings into higher-risk assets.
“These can offer the prospect of keeping pace with inflation but can be hit hard if investment markets fall.
“As always with retirement planning, consulting a financial adviser about your retirement plans is a good way to understand your retirement options, and how you might ensure your retirement income keeps pace with inflation.”
