(RTTNews) – UK households’ overall perception about financial wellbeing weakened in the third quarter despite the rise in household income from employment, data published by IHS Markit showed on Wednesday.
The Scottish Widows household finance index fell to 44.0 in the third quarter from 44.7 in the second quarter.
Despite fading in the third quarter, the pace of decline remained slower than at any other time since the onset of the COVID-19 pandemic, and a far cry from the spring of 2020, Markit said.
The index regarding the financial outlook also declined in the third quarter, to 49.2 from 50.3 in the previous quarter.
The survey revealed that the pandemic has led to changes in long-term financial planning when it comes to supporting their families. Almost three quarters of households considered preparing for the future financial wellbeing of loved ones in other generations to be important.
For the first time since the first quarter of 2020, households’ income from employment rose over the quarter. Business activity also continued to rise steeply.
The combination of rising activity and greater incomes led some households to take an optimistic view with regards to job security.
The survey showed that the amount of cash households have available to spend has declined further in the third quarter. Rising living costs have partly offset increased employment income.
As a result, household savings declined at the fastest rate since the end of 2020, with only the highest earners recording a rise over the third quarter.
UK households registered a sustained fall in demand for unsecured credit, such as overdrafts and credit cards, with the decrease the strongest on record.