ATMGareth Fuller/PA Wire

Three-quarters of families are bracing themselves for their finances to worsen in 2013 or at best stagnate, research has found.

Some 43% of households predict that their situation will deteriorate next year, while just 24% think they will see an improvement, Markit's latest household finance index said.


People aged between 55-64, working in the public sector, or living in Wales are the most likely to be downbeat about their prospects.

But despite the gloomy outlook, the pressure on families has eased off slightly compared with this time a year ago, the report said.

Overall, Markit's index stood at 36.8 in December, falling back from a 23-month high of 39.3 recorded in November and pointing to a sharp squeeze on household budgets over the last month. Readings above 50.0 signal that people's finances are improving and those below it a deterioration. While the latest figure is still a negative one, it shows a small improvement compared with December 2011's reading of 34.3.

Analysts expect families to come under renewed pressure next year amid a string of price hikes announced by energy companies, with increased food costs and rents also squeezing their budgets.

Markit said that around 32% of households noted that their finances had got worse in December, compared with just 6% who saw an improvement.

People in the oldest age category surveyed of 55-64 years were by far the most pessimistic about their finances next year, researchers said. There are four times as many people in this age group who believe their situation will deteriorate as those who expect to see it get better. This age group was also the most likely to believe their living costs are set to go up strongly.

When looking at the findings by job sector, public sector staff are more pessimistic than those in the private sector. Public sector workers also reported a recent marked drop in their incomes from employment. Only those working in manufacturing are positive on balance about their prospects for the year ahead. Those working in construction were found to be the most downbeat.

On a regional basis, households living in Wales were found to be the most pessimistic looking ahead, while those in the South West were the least negative, followed by families in Scotland.

© 2012 Press Association