Fewer people think their finances will get worse in the next three months, falling by 17 per cent since December 2022, according to the LV Wealth and Wellbeing Research Programme.
In its quarterly survey of 4,000 UK adults, LV revealed that UK adults are starting to feel more positive about their financial future.
The LV Wellness Tracker, a metric examining the financial wellbeing of UK adults, currently stands at +19, up by +4 since December 2022.
Ranging from -100 to +100, the LV Wellness Tracker produces a single measure of the nation’s financial resilience over time by comparing the number of people who are financially ‘comfortable’ to those who are ‘struggling.’
Overall, 59 per cent of respondents described their situation as comfortable, while 41 per cent said they were struggling.
Generational differences
While the overall picture is positive, LV said its latest data shows some clear generational differences in how UK adults are adapting to financial pressures and how optimistic they are feeling.
One in five (22 per cent) UK adults aged 18 to 34 expect their finances to improve in the next three months, yet the figures suggest this group is in a more precarious financial position than older people.
Despite the optimism shown by younger people about improving finances, Generation Z respondents (aged 18 to 26) were twice as likely to miss payments on credit cards and loans compared to the nation as a whole (8 per cent vs 4 per cent), as well as on mortgage or rent (8 per cent vs 3 per cent) and utility bills (8 per cent vs 5 per cent).
Millennials (aged 27 to 42) are twice as likely to have received a final demand letter (6 per cent vs 3 per cent) and were the most likely group to have used a pawnbroker in the past three months (5 per cent vs 2 per cent).
David Hynam, chief executive of LV, said: “The LV= Wealth and Wellbeing Research Programme tracks the financial confidence of UK adults and our latest data shows a slight rise in sentiment as inflation has slowed.
“Millennials and Generation Z are more negatively impacted and are more likely to need financial support.
“The LV Wellness Tracker has risen slightly, showing that positive sentiment does not always match financial situations.”
Hynam said while a fifth of 18 to 34 year olds expect to see their finances improve, some young people are experiencing high levels of unsecured debt.
“The green shoots of growth are there, but there is still work to be done to ensure everyone in our society has the opportunity to feel financially confident,” he said.
The research also found that respondents aged 35 to 54 felt more financially resilient than the last quarter, as their Wellness Tracker score increased by +6.
Overall, a quarter (26 per cent) of adults saw an increase in costs but said they have not been impacted by the rises.
This number grows to 47 per cent for those aged over 78.
Compared to UK workers, retirees generally reported feeling more financially comfortable, and over a third (37 per cent) were able to comfortably pay off their credit card or loan debts.
