Households’ confidence in own finances improves as determination to save grows
Households’ determination to save money during the coronavirus lockdown may have helped to bolster their confidence in their own future personal finances, an index suggests.
GfK’s index, which measures consumers’ confidence in their own finances as well as the wider economy, found people have become slightly less downbeat about their own “future wallet” in recent weeks.
There was a three-point increase in consumers’ expectations for the financial position of their households in the next 12 months, which moved from a score of minus three in a previous survey published on July 3 to zero in the latest research.
Looking at expectations for the general economy over the next year, the score on this measure was more firmly stuck in negative territory at minus 41, showing a very slight improvement from a score of minus 42 in the July 3 report.
People’s attitudes towards making major purchases deteriorated.
When asked, in view of the general economic situation, if they think now is the right time to make major purchases such as furniture or electrical goods, the score on this measure was minus 26, down from minus 25 previously.
The index also found a growing determination to put savings away. When people were asked if they think now is a good time to save, the score was 21, jumping by eight points from 13 in early July.
The overall index score remained negative at minus 27, unchanged from the score in the index published earlier in July.
Joe Staton, GfK’s client strategy director, said: “There’s been little to boost the public’s mood as the cost of the pandemic to the UK’s economy is becoming apparent.”
He added: “Many people have been savvy and saved money during lockdown… That could explain the one bright spark on the horizon – the three-point uptick in consumer expectations for the financial position of their households in the next 12 months.
“The way we perceive our ‘future wallets’ is key as it’s the one area over which we have day-to-day control and is a good indicator of our personal financial outlook for the year to come.”
Some 2,000 people were surveyed.