Families ‘feeling more positive’ about their finances

People in the UK are feeling more positive about their financial situation than they have been since 2010, according to a new survey from financial information firm Markit. 

It said its Household Finance Index (HFI), which surveyed 1,500 homes, has reached its highest level for over three years, reaching 40.8 in June. This is the same level the survey produced in February 2010.

However, the reading still suggests most people believe their household finances have been deteriorating.

Recorded readings that are below 50 show that the majority of people have noticed a reduction in their standard of living, while anything over 50 reveal an improvement.

Around 26 per cent of households said their financial situation was worse this month, while almost eight per cent reported an improvement, although Markit said the data pointed to a pick-up in the overall household financial outlook over the next 12 months.

Tim Brown, Markit senior economist, said: "Improving household finance trends are an early indication that the UK economy has continued to strengthen in June. Households perceptions of financial instability are now at a level unsurpassed over the past four and a half years

Though the majority of people expect their financial situation to get worse in the coming year, there was an improvement in people's expectations.

UK adults also appear to be less confident about their job security than they were in the past as the index measuring workplace activity fell from 53.3 in May to 52.8 in June.

While people seem to be getting more confident about their financial situation there are still clear signs many are worried about how they will manage in the year ahead as prices and inflation rises, while income continues to get squeezed.

This is especially a problem for those on low incomes or individuals who are lumbered with debt as there isn't enough money available to pay for everyday essentials. For this reason many are turning to debt management in order to get a good hold on their finances.

By James Francis