Millions of people expect their finances to worsen over the next three months as total outgoings rise and savings fall for 43 per cent of people.
According to LV’s latest wealth and wellbeing monitor, these figures are the worst they have been since June 2020 when the provider started its quarterly survey of 4,000 UK adults.
LV's research showed that consumer sentiment about their personal finances is continuing to worsen and is lower than during the first lockdown as one in three people described themselves as struggling financially.
LV’s protection, savings & retirement managing director, Clive Bolton said the figures highlighted how millions of people are being squeezed by the large rise in the cost of living and that growing energy bills are becoming a significant problem for many people, particularly families with young children and low income households.
“Consumer sentiment had been steadily improving between spring and early autumn 2021 but the sharp rise in the cost of living has dented consumers’ confidence. Standards of living are falling across the country,” he added.
The figures also showed a deterioration in finances over the past three months, with 53 per cent (28mn people) saying their finances had worsened in that time period.
This has been driven by inflation with 61 per cent of people (32mn) saying their total monthly outgoings have increased over the previous three months.
A significant number of people are cutting back on discretionary spending, with 31 per cent (16mn people) spending less money on socialising.
Young people aged 18-34 were the group most worried about money at 46 percent, while parents of young children (aged 0-10) were also very worried about money (44 per cent).
Las week, (6 July) the national insurance threshold was changed meaning that 30mn people will pay less tax.
The alterations were introduced by former chancellor Rishi Sunak in his spring statement earlier this year in a bid to ease the burden of the cost of living crisis on lower earners.
However, turmoil in government amidst the resignation of prime minister Boris Johnson following internal pressure from Tory colleagues with more than 50 government ministers resigning in less than a week, adds fresh uncertainty to the cost of living crisis.