Consumer Pulse Q4 2021

The interesting reversal of a previous optimism increase has continued in Q4. Those who said they’re optimistic about their household finances in the next 12 months declined to 48% from a peak of 61% in Q2 (note in Q3 and before, consumers were asked if they were optimistic about their future and not about their finances). This reversal in optimism was further supported by perceptions around household finances, with one in three consumers (31%) viewing their finances as “worse than planned,” up from one in four (27%) in Q2.

This shift in optimism may partly be influenced by concerns around cost of living increases: 75% stated they’re moderately, very or extremely concerned about the current rate of inflation. Two in five (43%) are already making changes to purchasing behaviour because of inflation; rising to 47% for Gen Z and 61% for Millennials.

One in four consumers (25%) intend on applying for new or refinancing existing credit in next 12 months. Interesting to note our survey found 81% of consumers claim lenders’ sustainability practices are moderately or very important in a credit purchasing or refinancing decision. A similar percentage (62%) stated a financial incentive from a lender linked to their individual carbon and sustainability footprint would influence a potential credit purchase.

Another key trend in the UK in 2021 has been the rise of buy now, pay later (BNPL). One in three consumers (35%) stated they’ve used this service in the last 12 months. Of those, 50% highlighted the ability to spread payments as a key reason for using this service; 30% claimed it enables them to afford a larger purchase. Usage is increasingly common across age groups: 58% of Gen Z and 60% of Millennials stated they’ve used the product; 31% of Gen X have as well.