Quarter of people ‘expect finances to worsen’

A quarter (25%) of people expect their finances to worsen in the first few months of 2022, according to a “wealth and wellbeing” study.

A third (33%) of people surveyed said their finances had already deteriorated over the past three months, LV= found.

Around one in seven (14%) people think their finances will improve in the next three months and 13% said their financial situation had already changed for the better in the past few months, according to the survey of 4,000 people across the UK in December.

As living costs surge, nearly half (48%) of people said they had seen their total monthly living costs increase, while 9% had seen a decrease.

Some 20% said they were putting less money into savings, while 16% were saving more.

Clive Bolton, managing director of protection, savings and retirement at LV=, said consumer sentiment had previously been steadily improving between spring and early autumn 2021.

He continued: “However, the appearance of the Omicron variant and rising infection levels has knocked confidence back to levels last seen in the dark days of December 2020.

“Inflation is becoming more of a problem for many people who say their outgoings have increased, 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.

“Many will be financially squeezed as the cost of essential items like home heating rise while returns from savings accounts – which typically form the bulk of retired people’s savings – remain low.

“However, the economy remains relatively strong and wages are rising for those people whose jobs are unaffected by lockdowns.”