Latest research from Barclaycard has revealed that a growing number of consumers are feeling confident when it comes to their finances – and many are planning on upgrading their lifestyles as a result.
Consumers appear to be starting 2016 with a "spring in their step", with the figures showing that 71% of consumers feel optimistic about their household finances over the next three months, with 74% being confident that they can live within their means – an increase of 8% from this time last year.
As a result, 58% feel confident in their ability to spend more on non-essential items, with these "lifestyle upgrades" having a positive knock-on effect for the retail and leisure sectors. These upgrades are set to include new clothes (39%), electronic devices (36%) and more meals out (31%), while one in three (34%) are planning at least one major purchase – such as a big family holiday or overseas trip (52%), new furniture (37%), a new car (27%) or even a new home (18%) – in 2016.
For many, this new-found spending ability is being driven by the fact that they feel better off now than they have done before (16%), while 13% say that it's time to treat themselves and their family after "austerity fatigue". Others see buying a particular item as a necessity (30.2%), while 19% simply want to take advantage of good deals.
Given such rising levels of confidence, it's perhaps little wonder that Barclaycard figures also show clear spending growth, with overall consumer spend during the last three months of 2015 being up 3.5% year-on-year. Online shopping has been the key driver of that growth (up 16%), while spending on entertainment rose by 10.2% over the year, followed by travel spending (7%) and household spending (3.5%).
"Consumers are starting the year with higher levels of confidence, thanks to lower fuel costs and interest rates, rising employment and real wage growth," said Chris Wood, chief operating officer at Barclaycard. "As a result, they're appearing more willing to make those bigger purchases that only come up every few years. These increased levels of confidence should be an encouraging signal for retailers, especially those selling holidays, cars and household goods.
"Spending on non-essential items looks set to continue as households plan to spend more on treating themselves and their families, thanks to months of careful budgeting and falling prices on essentials. But it will be interesting to see whether rising concerns over the global economy impact these plans, causing consumers to draw breath and slowing the pace of spending growth as we move forward into 2016."
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