The boost people received for their financial well-being after the foreclosure measures started has diminished, according to Scottish Widows.
The company’s latest household finance index fell from 44.7 in the second quarter of 2021 to 44 in the third quarter of 2021, despite the first increase in household income from employment since the first quarter of 2020.
However, the pace of the decline has remained slower than at any other time since the start of the Covid-19 pandemic, and far from spring 2020.
Part of the reason for this is improving trends in job security and income.
Households have also seen renewed pessimism about their financial outlook over the next 12 months. At 49.2 in the third quarter, this index was down from 50.3 in the previous quarter.
The youngest age groups (between 18 and 34) have resisted the general trend, remaining on average optimistic (index at 56.2 against 55.7).
Positive news in the third quarter came from the labor market as UK households saw improved job security and earnings from employment.
For the first time since the first quarter of 2020, household labor income increased over the quarter. At the same time, business activity continues to grow strongly, according to UK households.
The growth rate remained close to the survey record recorded in Q2.
Jackie Leiper, Director of Pensions, Stock Exchange and Distribution at Scottish Widows, said: “UK households saw slightly weaker trends as the recovery from the lockdown began to ease and the cost of life has increased.
“Overall financial well-being and cash available to spend fell at slightly faster rates than in the second quarter.
“However, our long-term financial planning tracking tools showed a wave of positive developments in the third quarter.
“About 10% of households are now considering intergenerational planning, suggesting that Covid-19 has made more families think about the importance of considering being financially prepared for the unexpected.
“A spark of good news has also come with the reopening of the UK economy which continues to boost workplace activity, as earnings from employment have increased for the first time since the start of the pandemic. . “