British consumers are displaying a strengthening sense of optimism about their financial wellbeing, with 34% of Brits saying they are financially better off today than five years ago, according to our new report on Changing Consumer Prosperity.
The study, which looks at consumers’ sentiment toward their financial position, willingness to spend and how that’s changed over time, reveals that British consumers are more optimistic about their financial wellbeing than several of their European counterparts, despite ongoing Brexit uncertainty. European countries that scored lower than Britain on consumer financial wellbeing included France (27%), Belgium (28%) and Italy (17%). Ireland scored significantly higher for financial wellbeing than the Europe average of 37%, with 44% of Irish consumers feeling better off than five years ago.
Despite the improvement in UK consumers’ sentiments around their finances, many are feeling the pressure of rising living costs, with only 16% of UK consumers feeling they can spend freely. This appears to be impacting British consumers’ spending habits, as they are increasing spending in ‘essential’ categories, with 36% of consumers spending more on groceries, compared with five years ago. There is also a decrease in consumer spending on other more discretionary activities, such as dining out (31%), entertainment and leisure activities (30%) and travel (29%).
It’s promising to see that, despite Brexit uncertainty, many UK consumers, in comparison to other European countries, are feeling more positive about their financial wellbeing than they did several years ago. However, with grocery spending up, and a decrease in travel and dining out expenditure, it’s evident that British consumers are becoming more aware and careful of how they choose to spend their money. Clearly, although UK consumers are feeling more comfortable in their financial situation, Brexit uncertainties may still be causing shoppers to be more cautious in their spending, therefore opting for cheaper alternatives instead of spending freely on luxuries like dining out.