As households face challenges, a Which? study emphasizes the need for creative payment solutions, especially during the holidays.
A growing number of households are missing important payments, thus it’s imperative that creative payment options be implemented in the lead-up to the holidays, according to new Which? study.
According to Which?’s most recent Consumer Insight Tracker, 9.8% of families reported missing or defaulting on a loan, credit card, housing, or household expense in the month of November. At 2.8 million households, this is the biggest number since April 2020 that has been noted.
Approximately one in ten (8.8%) renters reported missing a payment; 5.6% of household bill payees, such as electricity or water bills; 5.3% of credit card or loan payees; and 2.9% of mortgage holders reported missing a mortgage payment.
In order to pay for necessities in the month leading up to November 10th, 57% of respondents claimed to have made at least one change, such as reducing spending on necessities, taking money out of savings, selling belongings, or taking on debt.
According to Rocio Concha, head of policy and advocacy for Which?, “Which? is calling on businesses in essential sectors like food, energy, and telecoms providers to do everything possible to help customers get a good deal and avoid unnecessary or unfair costs and charges this winter.”
The fact that one in ten households failed to make necessary payments in a single month is quite concerning. These strains on household finances are only going to get worse in the upcoming months as Christmas and the colder winter draw near.
Declining self-assurance
Consumer anxiety about price increases is still very much present, as nearly 85% of respondents voice concerns about rising energy bills. Furthermore, 83% of respondents are worried about the skyrocketing cost of food, and roughly 79% are concerned about the rising cost of fuel.
Additionally, for the second consecutive month, consumer confidence in their current household financial situations and their forecast for the UK economy has declined. More over half of the participants predict a decline in the UK economy in the upcoming year, while only sixteen percent express optimism about an improvement. As a result, the net confidence score for the future economy falls to -37, a substantial 10-point decrease from two months prior.
Similarly, this month’s consumer ratings of their own household finances have declined, falling from a previous score of +21 to +14. These data highlight a persistent decline in consumer confidence since the start of the crisis caused by rising living expenses.
These numbers present a dismal picture of the financial situation as the holiday season approaches. Essential companies, such as energy companies, telecom companies, and supermarkets, are being urged by Which? to step up their customer service and value-for-money initiatives.
Customized exchanges
Chief marketing officer Theresa McEndree of the recurring billing platform claims that Online merchants are gradually moving toward data-driven subscription models that offer more individualized experiences.
“Brands will focus on going deeper into consumer insights to create customized interactions,” she stated. To improve the experience overall, this entails incorporating AI recommendations and encouraging community interaction.
“Sustainability and ethical behavior will be essential, as they are fundamental to establishing credibility and genuineness. In addition to meeting consumer demands, the objective is to proactively anticipate them in order to build enduring connections that go beyond simple transactions.
