Overview
This report conducted a matter of weeks prior to the 2024 General Election, provides a summary of the financial wellbeing of UK households across this parliamentary term. It highlights what has – and hasn’t – changed for UK households in this time, beginning with an overview of UK households’ financial wellbeing.
Key findings
• In May 2024, nearly two-in-five households (39%) were in ‘serious financial difficulties’ or ‘struggling’ financially. In April 2020, 28% of households were in this situation. This means that – since the last UK General Election – an extra 2.9 million households now face significant financial problems.
• There has, however, been a slight improvement in the financial wellbeing of UK households since October 2023, so while over four million households remain in ‘serious financial difficulties’ (15%), this is around 700,000 fewer than in the previous wave (17%).
• This partial recovery has been uneven though: while middle-income households have seen a nine percentage point fall in the proportion ‘struggling’ or ‘in serious difficulties’ (from 39% to 30%), the lowest income households have seen just a one percentage point fall (63% to 62%).
• With inflation slowing, there has been an easing of cost pressures for the average UK household. However, households with fewer resources – those in lower income groups, renters, those in receipt of benefits, those living in more deprived areas and single parent families – are still finding it hard to afford everyday essentials – such as food, energy, housing and the costs of transport.
• There are some positive signs that households are having to cut back less and rely less heavily on consumer credit in order to make ends meet. Fewer households (38%) were shopping at cheaper food stores or buying cheaper food products because of concerns about cost, down from 45% in October 2023. And more households were paying off their credit cards in full, with four-in-ten (40%) of households with credit cards reporting ‘always’ or ‘usually’ paying off their cards, up from 35% in October 2023.
• Nevertheless, around one-in-eight households (13%) had faced some form of debt collection or enforcement action in the past six months. These debt collection activities mostly related to providers of unsecured credit (53% of those experiencing debt collection), followed by local authorities (37%), mortgage providers or landlords (27%) and energy providers (23%).
• Reflecting the small improvements in average living standards, confidence has been trending upwards in the last 12 months, from a low point in May 2023 (Wave 8) when only four in ten households (41%) felt confident about their future situation, up to 49% in October 2023 (Wave 9), and rising to 53% in May 2024 (Wave 10). This is still below the levels of confidence seen in October 2021, when six-in-ten (59%) of households felt confident about their future finances.
• Public spending and taxation will be high on the agenda for the incoming government. Twice as many Tracker respondents agreed that spending on public services (like the NHS) should be increased even if it meant tax rises for households like theirs (56%) than agreed that taxes should be reduced for households like theirs, even if it meant less spending on public services (24%).
About the research
abrdn Financial Fairness Trust has commissioned a periodic cross-sectional survey to track the financial situation of UK households since the start of the coronavirus pandemic in early 2020. The latest wave of this survey – conducted in May 2024 – gives insight into the nation’s finances during the ongoing cost of living crisis and on the eve of the 2024 General Election. The findings are based on responses from nearly 6,000 households about their income, payment of bills, borrowing, savings and ability to pay for other essentials such as food. The survey was run by Opinium, while the analysis was conducted independently by the Personal Finance Research Centre at the University of Bristol.