Consumers are starting 2016 with a spring in their step, with new research from Barclaycard revealing continued confidence in their own financial health.
The latest research, which takes an in-depth look at the country’s spending patterns and confidence levels, found that 71% feel optimistic about their household finances when thinking ahead to the next three months. Additionally, three quarters (74%) are confident in their ability to live within their means each month – up eight percentage points from January 2015.
This comes as Barclaycard found that over half (58%) of respondents are feeling confident in their ability to spend more on non-essential items. These ‘lifestyle upgrades’ should result in spending uplifts for the retail and leisure sectors.
Underlining this sense of growing confidence, one in three (34%) plan to make at least one major purchase – the type that only comes up every few years or so – in the next twelve months.
16% of those who plan to up their spending in 2016 will do so because they feel better off now than they have before and 13% say that after ‘austerity fatigue’, it’s time to treat themselves and their family. An ingrained search for value is another motivator for a fifth of shoppers, as they plan to spend more simply to take advantage of great deals.
In the last quarter of 2015, Barclaycard data showed consumer spending growth continued to rise, with overall spend up 3.5% year-on-year. Online shopping in particular reported its strongest-ever quarterly growth, at 16%
Chris Wood, chief operating officer at Barclaycard, says: “Consumers are starting the year with higher levels of confidence, thanks to lower fuel costs and interest rates, rising employment and real wage growth. 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.”
“Spending on non-essential items, resulting in a further boost to the UK economy, 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.”