23 January 2017 - Janet Bird
Consumer confidence dipped toward the end of 2016, with more people expecting to be worse off at the end of this year than better off.
This was a key finding of the latest consumer sentiment survey carried out by multinational professional services network PwC, which questioned over 2,000 consumers across England, Scotland and Wales.
But the gap between those who expected to be worse off and those who expected their prospects to improve in 2017 was small - just one percentage point. And consumers are still more upbeat than at any time between 2008 and 2014.
The survey found that 26 percent of those surveyed expected to be worse off in 12 months than presently. However, the 25 percent who were optimistic about their future financial situation represented an increase on previous surveys in 2016 and 2015, when only 21 percent and 22 percent respectively expected to be better off in a year than they were currently.
PwC found increased employment and the introduction of the National Living Wage were driving positivity among those who expected to be better off in 2017, while concerns about Brexit and the economy were major factors influencing those fearful for their financial future. Indeed, 50 percent of respondents who expected to be worse off cited the economy as the reason for their concerns.
Those in the 45-54 and 55-64 age groups were the least optimistic, with 31 percent and 34 percent respectively expecting to be worse off by next year.
However, optimism among those in the 35-44 and 45-54 age groups also showed a marked drop since the last survey in September, with these groups perhaps worst affected by inflationary rises in the price of fuel and holidays.
While, based on the survey findings, PwC expects consumer spending to hold up next year, it anticipated consumer spending priorities will change, with many respondents already expecting to spend more on groceries and holidays.