The figures are the worst reported by the LV= Wealth and Wellbeing Monitor since December 2020.

A third of those surveyed for the quarterly report said their finances have already deteriorated over the past three months.

Almost half (48%) said their total monthly outgoings have increased, with online 9% saying they have decreased.

Two in five (20%) of those surveyed said the amount they are saving has fallen.

Clive Bolton, managing director of protection, savings & retirement at LV=, said: “The Covid-19 pandemic has been incredibly difficult for the nation and had a huge impact on the lives, personal finances and mental health of millions of people.

“Consumer sentiment had been steadily improving between spring and early autumn 2021 as the success of the vaccine programme, fall in death rates and easing of lockdown restrictions allowed to life to begin to return to normal. However, the appearance of the Omicron variant and rising infection levels has knocked confidence back to levels last seen in the dark days of December 2020.”

The LV= Wealth and Wellbeing Monitor uses indices to track overall changes to spending, saving and finances. The indices are calculated by subtracting the % who stated a negative change over the past three months from the % who stated a positive change over the past three months, to work out the overall impact.

The index measuring people’s finances over the past three months was -20 in Dec 2021. More people said their finances have got worse over the past three months compared to Sept 2021 when the index was -11. The figure is the worst record since the Monitor started in June 2020.  

The index measuring financial outlook for the next three months was down sharply at -12 in Dec 2021 compared to -5 in Sept 2021. A negative index means more people thought their finances will worsen over the next three months compared to those who think it will improve. The figure is the worst since Dec 2020.

The index measuring saving has fallen to -3 in Dec 2021 from -1 in Sept 2021 and 10 in March 2021, indicating that people are spending more and saving less.

LV= surveyed over 4,000 nationally representative UK adults for the Wealth and Wellbeing Monitor via an online omnibus conducted by Opinium in June 2020, September 2020, December 2020, March 2021, June  2021, September 2021 and December 2021.