LV=’s latest Wealth and Wellbeing Research Programme has highlighted how the personal finances of UK adults continues to be affected by the high cost of living despite some signs of improvement in consumer sentiment.

The Wealth and Wellbeing indices that track current finances and future outlook show a slight rise in consumer sentiment compared to a year ago, as UK adults were 5% more likely to believe that their finances will improve in the next three months. The index measuring savings also saw an increase, with a 3% rise in pension savings since March 2023.

The LV= Wellness Tracker also rose for the second quarter in a row to +20, but revealed a shifting financial outlook across different generations.’ Ranging from +100 to -100, the tracker currently stands at +20 (60% comfortable vs 40% struggling), up by +5 in the previous year indicating steady improvements as some age groups feel more positive than others.

Those aged 60-78 (Baby Boomers) reported the biggest change in financial resilience compared to the last quarter, as their LV= Wellness Tracker score increased from 0 to +7. Yet this generation alongside 44-59 year olds (Generation X) had the most negative outlook for the future ahead. Half of respondents aged 44-59 (50%) say they are financially struggling.

Further statistics from the programme – a quarterly survey of 4,000 UK adults – showed:

• 40% of UK adults are worried about the rising prices of day-to-day items
• 45% of UK adults said that they can only just afford day-to-day bills, with 10% stating that they cannot afford it
• Half of renters (51%) are worried about the rising prices of day-to-day items
• 38% are worried about the rising costs of energy bills
• One in four mortgage holders are worried about the impact of interest rate rises on mortgage repayments compared to 10% of the general public
• One in five investors surveyed are worried about their savings being devalued by inflation

Compared to the general public, parents with children under 10 are more likely to fall behind on utility bills (9% vs 6%). They are also twice as likely to miss payments for credit cards or loans (8% vs 4%) or miss mortgage/rent payments (8% vs 3%).

David Hynam, chief executive at LV=, said: “As a mutual, our Wealth and Wellbeing research is important to us. It helps us to understand what is impacting people across the UK and informs the support and services on offer to our customers.

“Although our Wealth and Wellbeing Research Programme shows that fewer people are financially struggling compared to 2023, many are still worried about their finances and what the future holds for them.

“Despite the nation gradually becoming more financially resilient, our data shows that socialising spend has remained stable as many people are prioritising their everyday living costs.”