Despite the challenges, the survey from the LV= Wealth and Wellbeing Research Programme suggests finances are beginning to stabilise for some.

The proportion of people who think their finances will worsen over the next three months has fallen from 57% (30m) to 46% (25m).

About 6m adults expect their finances to improve over the next three months – up from the previous quarter. 

The LV= Wealth and Wellbeing Research Programme surveyed 4,000 UK adults in December.

The vast majority (69% / 37m adults) say that they have seen an increase in their total monthly outgoings in the past three months, including their supermarket spend (68%/36m).

Some 10% of adults (6m) say they expect their finances to improve over the next three months - an improvement on the previous quarter when only 8% (4m) said this.

Key figures from the survey showed:

• Financial outlook: The index measuring financial outlook for the next three months was -36 in December 2022 compared to -49 in September 2022. A negative index means more people think their finance will worsen over the next three months compared to those who think it will improve

• Finances over past three months: The index measuring people’s finances over the past three months was -49 in December 2022. This index is a small improvement compared to September 2022 when the index was -52

• Income and outgoings: The index measuring income improved, rising from 5 to 9, as some workers are seeing pay rises, however for many this is not enough to offset rising outgoings

• Savings index: The Savings index remains low. The index measuring the amount of saving was -16 in December 2022 from -17 in September 2022

• Spending on socialising and at the supermarket: The index measuring spending at the supermarket was 57 in December 2022, compared to 48 in September 2022. A far greater proportion of people (68% or 36m) say their supermarket spend has increased compared to those who say it has decreased (12% or 6m), while 32% (17m) are spending less money on socialising

Clive Bolton, managing director of protection, savings and retirement at LV=, said: “Millions of people remain gloomy about their finances and are struggling to make ends meet. However, after 12 months of steady deterioration, several of the indices we track have stabilised or improved compared to the previous quarter. For example, this is the first time that our two key indices - measuring financial outlook over the next three months and finances over the previous three months - have begun to improve since autumn 2021.

“It’s too early to say if this is the start of a long-term improvement in people’s finances but if the cost of living and inflation begin to ease, people could begin to feel more optimistic about their finances.”

•  LV= surveyed 4,000 nationally-representative UK adults via an online omnibus conducted by Opinium in December 2022.