And the most pessimistic are those aged between 55-65 years, who are most affected by the rising costs of utilities, fuel and food prices.
Sentiment is now at -36, falling a further 16 points from the last iteration in March and is lower than at the start of the first national lockdown in March 2020 (-26 per cent) but still higher than during the 2008 global financial crisis (-51 per cent) and the height of post-recession austerity measures in 2012 (-42 per cent).
As inflation continues to rise, pressure is mounting on the cost of essential services and non-discretionary spending. The survey findings showed that all ages and socio-economic groups are having to adjust their lifestyles accordingly.
More than 75 per cent of all adults surveyed agreed they had worried about the rising cost of living over the last three months, with 78 per cent stating they had made some form of spending cutback over the same period.
Despite confidence falling across almost every group, the gap between the most and least optimistic was widening. However, the latest update showed a decline across all demographics and socio-economic groups.
Over-65s have joined the 55-64s as the groups with a steep decline to the lowest sentiment (-56 per cent), driven by increases in utilities, fuel and food prices. While 18-24s remain net positive at +7 per cent, many are likely sheltered from heightened costs by living with parents or not being responsible for increasing bills. However, they are also most likely to benefit from recently entering the workforce and raising their income.
Regardless, they have still seen a significant drop in sentiment – similar to that in the middle and older age groups – and were the most worried (82 per cent) about the rising cost of living.
There have also been drop-offs across all levels of affluence. Professional classes who previously appeared to have the greatest financial resilience, are now showing a changed perspective, with over 75 per cent of respondents in this category now concerned about the rising cost of living.
According to the survey, over three-quarters of all adults have cut back their spending in some way with 41 per cent making fewer purchases and 35 per cent trading down to cheaper items, eating out less and reducing their energy consumption respectively. Holidays, interestingly, showed some signs of resilience. Only 11 per cent of consumers said they have postponed a holiday in the last three months – arguably due to pent-up demand for travel and getaways post-pandemic.
Findings showed a reversal of fortunes in discretionary categories that benefited from pent-up demand post-lockdown. Home improvement sees a net spending intention of -24 per cent, holidays -25 per cent and eating -38 per cent and going out 39 per cent see significantly diminished spending intentions compared to a year ago as lockdown restrictions were ending. Similar to March’s survey, groceries, driven by inflation, is the only category where more people think they are going to spend more, than think they are going to spend less, (9 per cent), over the next year.
