Two-thirds of UK consumers fear Burnham’s policies could leave them worse off

Andy Burnham’s early cost-of-living measures may have given households some immediate relief, but nearly two-thirds of UK consumers (63%) are concerned that the Government’s recently announced policies could ultimately leave their household worse off, according to new research from Novuna Personal Finance.

The findings come after the Government’s decision to remove VAT from household electricity bills from October and reduce the cap on single bus fares from £3 to £2 from January 2027- and ahead of its first Budget in October.

The second wave of Novuna’s Consumer Confidence Tracker found that just 30% of consumers are confident the Government can deliver its policies without increasing the amount they personally pay in tax, while 36% are not confident.

Theresa Lindsay, Chief Marketing Officer at Novuna, said:

“People want help with the cost of living, but they don’t want today’s giveaway turning into tomorrow’s tax bill. Our research shows people have very little appetite to pay more, and would much rather see the Government scale back its plans or find savings elsewhere.

“That concern comes as spending confidence is already weakening. Since our last survey, more consumers are cutting back, while those expecting to keep spending tightly controlled has risen from 25% to 34%. If higher taxes follow, any boost to confidence could quickly disappear.”

There is also a striking generational divide. Half (50%) of 25 to 34-year-olds are confident the Government can deliver without increasing the tax they personally pay, compared with just 19% of over-55s.

When asked how the Government is most likely to fund its plans, one in five (20%) expect taxes paid by most households to increase, making this the most common response. A further 16% expect higher taxes on wealth or property, while 15% think taxes will increase mainly for higher earners.

Public backs spending restraint over higher household taxes

The research also highlights how little financial headroom many households currently have to pay more. Over a third (37%) would not be willing to pay any additional income tax each month to help fund the Government’s policies, while a further 21% would only be willing to pay less than £10.

Older consumers are particularly reluctant to pay more, with almost half of over-55s (47%) saying they would pay nothing extra, compared with 27% of 25 to 34-year-olds.

Asked how they would prefer the Government to fund its plans, consumers show little appetite for higher household taxes. Just 7% favour increasing taxes on most households. By comparison, more than four times as many (29%) would rather see some policies delayed or scaled back (15%) or spending cut elsewhere in public services (14%). A further 19% favour a broader mix of spending reductions, tax rises and borrowing.

Households are still in cut-back mode

Novuna’s latest consumer confidence tracker also suggests that consumer caution is becoming more entrenched. A third (34%) expect to keep their spending tightly controlled over the next three months, an increase from 25% in April.

The proportion cutting back on non-essential purchases has also gone up from 35% to 40%, while 36% are cutting spending on eating out and socialising, up from 31%. Almost a third (31%) are switching to cheaper brands, compared with 26% in April, suggesting people are still making practical changes to keep everyday spending under control.

The Novuna Consumer Confidence Tracker runs quarterly to monitor how household finances and resilience are changing over time, tracking attitudes and behaviours across spending, saving, borrowing and financial pressures for the months ahead.