Consumer Pulse Q3 2021

Despite UK consumers generally showing increased optimism throughout 2021 as lockdown measures have been removed and the vaccination process accelerated, we’ve recently seen a reversal of this trend. In Q3 2021, 54% of UK consumers said they were ‘somewhat, very, or extremely’ optimistic about the future, down from a peak of 61% in Q2 2021. Despite the drop, this still compares favourably to Nov. 2020 when only 34% voiced optimism. Further reinforcing a dip in optimism, consumers with a ‘somewhat, very or extremely’ pessimistic view of the future increased from 20% in Q2 to 25% in Q3.

This reversal in optimism was supported by perceptions around household finances, with consumers viewing their finances as ‘worse than planned’ growing from 26% in Q2 to 32% in Q1. In contrast, discretionary spending — as a factor of household spend composition — remains stable with 44% identifying cutting back on this as a key change, which is similar to Q1. There is, however, an expectation that discretionary spending may decrease, with 38% of consumers expecting to see a decrease in coming months, an increase from 31% in Q2.

About one in four consumers (24%) intend on applying for new/refinanced credit in next 12 months, continuing a downward trend this year from 32% in Q1. Of those planning to apply, 44% nominated a new credit card, while a further 32% identified a new or refinanced mortgage as being the priority.

More specifically, demand for credit is rising for younger consumers: 42% of Gen Z and 34% of Millennials plan to apply for new credit or refinance existing credit compared to 9% of Baby Boomers. For Gen Z planning to apply, credit cards remain in demand with over one in three (38%) looking to apply for a new credit card in the next year — an increase from 26% in Q2. This may suggest that credit cards remain an important point of credit access for younger demographics despite the rise of alternatives, such as buy now pay later (BNPL) products.

If you’re a consumer with questions or issues related to your personal credit report, drivers history report, disputes, fraud, identity theft, credit report freeze or credit monitoring services, please visit our Customer Enquiries page for assistance.

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