From Drained and Desperate to Affluent and Apathetic

• Context
• The study
• Key findings
• Points to consider

Context

Continuous price rises on food, fuel and energy have left many consumers feeling emotionally distressed and worried about making ends meet. But there are differences in how people are experiencing and reacting to the crisis. The aim of the report is to improve understanding of who is hardest hit and the effects of the crisis on them in order to ensure targeted support can be provided effectively. This report presents new research which explores the critical factors driving the varying experiences of UK households and how people’s behaviours, attitudes, and sociodemographic characteristics interact to identify distinct segments of the population experiencing the cost of living crisis in different ways. The resulting segmentation gives insights into the impact of the crisis on the UK population, and can be used to help target support most effectively.

The study

This research was conducted via a 20-minute online survey, interviewing a nationally representative sample of 4019 respondents. All interviews took place between 7th and 27th March 2023. The sample had quotas by age, gender, region and social grade and was also weighted to ensure it was representative of UK consumers. Topics covered included financial security, physical health, emotional wellbeing, social life, work life, home life, behavioural changes and attitudes and outlooks.

The data was then segmented to produce six segments that relate to how people in the UK are coping with increases in the cost of living. The research was commissioned by consumer organisation Which? and conducted by research agency Basis.

Key findings

The findings include the following:

• Two-thirds of people have had their financial security negatively affected to some extent (67%) by the crisis, which has meant some households are falling behind or struggling to pay for essentials.
• Almost half of households across the UK have been struggling to keep up with their rent or mortgage payments, and nearly one in 10 have fallen behind on them (8%).
• Nearly half of households have not turned the heating on when it is cold (46%), which can increase the risk of heart disease and poorer mental health.
• The financial strain has had damaging effects on people’s mental and physical health. Many people are worried (46%) and stressed (44%) on a daily basis, and some are even having sleepless nights.
• Nearly two-thirds of those hit hardest are currently in employment (64%), yet are struggling to make ends meet on their wages. These people do not qualify for most social security or other targeted support, and are being left to manage the crisis alone.
• Even amongst people who are receiving government support, more than half felt that the support they received was insufficient to help them with rising expenses (55%).

The segmentation resulted in six segment which range from those most seriously affected – the ‘Drained and Desperate’ to those least affected – the ‘Affluent and Apathetic’.

The two segments most affected include ‘Drained and Desperate’ which equates to 9.2 million people who are already facing severe hardship, facing significant mental distress and potentially long-term physical harm as a consequence, and ‘Anxious and at Risk’ which equates to 7.9 million people who, while avoiding the most severe harm to date, are more reliant on debt, and could be at significant risk in the months ahead.

Points to consider

• Methodological strengths/weaknesses: The report discusses the segmentation process in detail. The report gives details of other segmentation options that were considered.
• Applicability: Of interest to anyone to government, policy makers, support agencies and anyone working with disadvantaged families – especially those in work.
• Relevance: Highly relevant as the cost of living continues to be high and many households are struggling
• Generalisability: The research is specific to UK consumers but the range of different responses and impacts is likely to be similar in other markets