How confident do you feel about the state of your finances? If you're anything like the respondents to Lloyds' latest Spending Power survey, your confidence is hopefully on the up, with attitudes towards current financial, future financial and employment situations all found to have improved in recent months.
The results of the survey mean that the overall Spending Power Index rose by 3 points in November, building on the gains of the previous month, with the figure now standing at 161. Attitudes towards the current situation noted the strongest growth of five points, now standing at 210, with the increase driven by improved sentiment towards personal financial situation, which was up by six percentage points (+6pp) to stand at +31%.
Meanwhile, sentiment towards household financial situation also climbed significantly, up 9pp to +26%, marking an all-time high! That's got to be a good sign for the state of the nation's finances, and much of this improvement is thought to be due to unemployment being at its lowest level since 2006, together with signs of improved wage growth.
As for what the future holds? Well, sentiment towards the future situation also improved: the score rose by two points to stand at 112, the highest level seen this year. This was driven by a slight but welcome increase in those who think they'll have 'more' or 'much more' disposable income in six months' time (standing at 24%, up from 22% in October), and has been supported by stability towards job security (unchanged at +57%).
In similarly welcome news, there has also been a marginal increase in those planning to pay off 'more' or 'much more' debt in the next six months, now at 18% (the highest figure this year), while those planning to save 'more' or 'a lot more' over the same period continues to rise, up to 24% in November from 23% in October.
This all paints a very positive picture in terms of finances, with Patrick Foley, chief economist at Lloyds Bank, saying that spending power confidence has been lifted by a more upbeat assessment of current circumstances, and a greater sense of optimism around the outlook.
"With price pressures for essentials still subdued, and some improvement in wage growth becoming evident, households are continuing to feel better about their personal financial situation, particularly those who say money is tight. This bodes well for the UK's solid pace of economic recovery being sustained in 2016."
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