UK consumer confidence has improved to its highest point since August 2007, new figures from YouGov and the Centre for Economics Research show.
However, in the wake of last week’s Budget with measures aimed at older people, the data show that the over-55s are still struggling with relatively low levels of economic confidence.
The analysis finds that only 11% believe their household financial situation will improve over the next 12 months compared to 21% of the general population. The figures suggest that one of the reasons for this is that because their economic wellbeing is less tied to improvements in the labour market they have felt fewer of the benefits of the jobs-led recovery.
YouGov/Cebr’s findings show there is still an air of caution among older consumers. Almost half (49%) believe there will be no change in their household’s finances over the next year, explaining why the majority (56%) would save a windfall rather than spend it (20%).
However, the research, based on YouGov’s economic tracking data, shows that the government’s proposed changes in pensions could lead to a slight increase in older peoples’ spending power. Over-55s are much less likely than the general population to use a windfall to pay off debts, largely because they have fewer debt commitments to meet.
Stephen Harmston, Head of Syndicated Research at YouGov: ‘Despite being such a major part of the economy, older people are the most wary consumer group as the recovery gains ground. Over-55s tend to be asset rich but cash poor and are further behind other consumers when it comes to feeling the benefits of the upturn. Although many think the economy in general is improving, they are sceptical about their own financial situations. A large number of over-55s expect things to get worse and few expect them to get better. It remains to be seen if last week’s Budget proposals on pensions and savings will see an increase in their consumer confidence.’
Charles Davis, Director at the Centre for Economics and Business Research: ‘Older consumers are a major part of the economy, contributing about half of consumer spending. However, they are still being tentative as the recovery gains ground, as shown by their lower levels of consumer confidence than the population in general. This is party driven by the fact that their economic wellbeing is less tied to improvements in the labour market. As a result, they are feeling fewer benefits from the jobs-led recovery.’
For more information and a copy of the report visit YouGov’s website here