The latest Deloitte Consumer Tracker found that over the last six months, 39% of consumers have become less optimistic about their disposable household income, with just 17% indicating any confidence about their current financial situation.
While many people are starting to spend more, they are only doing so on essential items. For example, there was increased spending in the past six months on items like utility bills (45%), transport (33%), healthcare (30%), and housing (22%). However, people are spending less on non-essential items and activities like going out (39%), restaurants and hotels (39%), alcoholic beverages (35%), and clothing and footwear (33%).
This pattern is set to continue with a considerable number of consumers stating they felt they will spend more in the next six months on the essentials. The findings also indicate there will be marginal spending rises across non-essential items.
Almost half said they pay money into a savings account every month while 40% are making monthly repayments on loans.
Half of those surveyed said they do not pay into a pension fund.
Head of consumer business at Deloitte Kevin Sheehan said despite economic improvements, for many people things have gotten worse rather than better.
“While the findings show that many consumers’ financial situations have stayed the same over the last number of months, for those that have experienced a change in circumstances, it is more likely to have gotten worse than better. While marginal increases in spend are anticipated, these are mostly likely to be on essential items, with little left for discretionary items,” Mr Sheehan said.