• 62% report confidence in financial position, compared to 44% during first quarter of year
• Disposable income also up, with retiree savers feeling greatest benefit
• Despite rising confidence, savers remain pragmatic with cuts to food shop spend and energy usage

The financial confidence of savers improved during the second quarter of the year, but consumers are still cutting back on spending in the face of inflationary pressures, Paragon Bank research has found.

Paragon’s survey of over 1,750 savers found that 62% felt confident in their financial position during the quarter, compared to 44% in the first quarter of the year. Conversely, those lacking confidence in their financial position reduced from 25% to 18% over the same period.

Confidence was strongest in those of retirement age – 69% of those aged between 65 and 74 said they were confident in their financial position, compared to 61% of those aged between 55 and 64 and 56% in the 45 to 54 age category.

The uptick in confidence coincided with an increase in the proportion of savers reporting improving disposable income – 29% recorded improving disposable income during the quarter compared to just 10% during the first three months of the year.

Conversely, those reporting shrinking disposable income also improved - 35% reported reduced disposable income in the second quarter compared to 46% during the first three months of the year.

Again, age was a clear factor here, with 38% of those aged 65 to 74 reporting improved disposable income compared to just 15% of those aged between 55 and 64.

Despite the improvement in confidence overall, savers continue to adjust their spending to cope with inflationary pressures on their finances.

Amongst the areas consumers have cut back are food shopping, home energy usage, dining out and holidays. Socialising and car usage have also taken a hit.

Nearly two thirds (62%) of respondents said they had reduced home energy usage during the second quarter, whilst 45% reduced the amount of food they buy in their weekly shop. Meanwhile, 49% have reduced the frequency that they dine out, with 34% stating they have cut the amount they spend on holidays.

Areas where people have completely cut spending include cinema (13%), concerts or the theatre (9%), takeaways and days out with an entry cost (both 8%).

Derek Sprawling, Paragon Bank Savings Director, said: “Despite the high inflationary environment we are living through, both confidence and disposable income improved during the second quarter of the year. This may align with the warmer weather and people having to use their heating less and some costs, such as petrol, starting to come down.”

He added: “The improved confidence may also reflect the demographic of the saver population as they tend to be more mature and have a small or no mortgage. With savings rates heading upwards during the period, this means they have been able to generate better returns on their money than in previous quarters.”

For further information contact:

Michael Clarke
Head of Media Relations
Paragon Bank
07740090746

Notes to editors:

Paragon surveyed 1,750 savers between 3 and 13 July 2023.

Paragon Bank PLC is a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.