TransUnion Consumer Pulse Report Q2 2024

TransUnion’s quarterly survey explores how consumers’ personal finances have changed and what changes they expect in the future. The study measures shifting consumer attitudes and behaviours based on the dynamics of income, debt and identity theft. The analyses and insights give consumers a voice and inform businesses’ decision-making as they seek to create economic opportunity for consumers.

Consumer distress prevails

As the UK emerges from a period of abnormally high inflation, high energy prices and a technical recession, consumers are naturally feeling the burden of heavy financial stress. Even with UK Consumer Prices Index (CPI) growth falling to 2.0% in May 2024 from a recent peak of 11.1% in Oct. 2022, the cost-of-living stresses that built up over the last few years are not necessarily disappearing.

The previously tight labour market continued to ease in Q2 with UK unemployment reaching 4.4% in April and jobs vacancies falling for the 23rd consecutive month. UK wage growth also softened from its recent peak but exceeded inflation by 2.3% YoY up to April.

 

Growing personal optimism

Even amongst these current stresses, the prevailing trend was toward optimism. Among respondents, 43% said they’re optimistic about their household finances in the next 12 months, up from a low of 26% in Q3 2022 (TransUnion began surveying the subject in Q1 2021). Younger generations expressed the most optimism: 58% of Millennials and 54% of Gen Z.

 

Households reliant on savings to cover everyday costs

Even with increased financial optimism, the levels of financial distress aren’t dissipating — especially among younger respondents. For Millennials, 18% said they cut back on saving for retirement and 15% increased their usage of available credit in the last three months, though 23% claimed to have paid down their debt faster in that time period (the highest among generations). Savings are also at risk in the current economy with 23% of those who said they wouldn’t be able to pay at least one of their current bills and loans in full claiming they’d pay some of their current bills and loans by using money from savings.

It terms of how that translates to spend activity, 55% of all survey respondents indicated they cut back on discretionary spending (e.g., dining out, travel, entertainment) in the past few months. Nearly half (47%) of respondents planned to decrease spending on discretionary items, large purchases like appliances and cars (38%), or retail purchases like clothing, electronics or durable goods (36%) in the next three months.

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