CashNews.co
People in the UK are feeling significantly less financially included than they used to be, as the pressure of the cost of living crisis continues to weigh on the public according to research by Principal Financial Group.
The proportion of people who feel financially included in the UK has dropped to 56% from 73% a year ago, as only 41% said they see the government as behaving in a financially inclusive way.
Confidence in individual economic circumstances has also deteriorated, with only 28% feeling confident about finding a new job if needed, down from 50% six months ago. Despite positive economic forecasts, consumer confidence remains subdued, with only 31% feeling confident about the near-term economic outlook while just 39% feel able to manage their debts.
However, employers have seen the largest fall in consumer trust of any group, with those who agree their employer acts in a financially inclusive way has fallen 14 points, from 70% to 56%.
The news comes despite a raft of upgrades to economic forecasts for the UK from analysts, suggesting that the strengthening macroeconomic environment was failing to translate through to UK households.
Seema Shah, Chief Global Strategist at Principal Asset Management, said “Understanding and encouraging financial inclusion should be an imperative not only for policymakers, but also for investors.
“The extent to which people feel financially included and their perceptions of how effectively governments, financial systems and employers support their wellbeing can give an indication of longer-term confidence and spending patterns which could underpin or undermine economic health.
“UK consumer confidence has remained subdued over the past 12 months as inflation has remained sticky and rates have held higher for longer.
“In real terms, UK households have been poorer over the past 12 months. Perhaps unsurprisingly the population is less convinced that actions taken by the government, the financial system or their employer are doing much to improve their financial circumstances.
“Investors should take note of this sentiment. Economies where people don’t feel they can manage their debt or rely on steady employment are not conducive to confidence and consumer spending.
“In the near-term, aided by greater political stability, the UK looks more attractive to us than it has for some time, but any growth plan from the new government will need consumers to feel they are able to spend.”
