Why is UK consumer confidence low?

UK consumer confidence has been low for years now. The headline indices confirm it, the economic commentary repeats it, and most boardrooms have accepted it as background noise.

But “confidence is low” isn’t an explanation – it’s a symptom. The more useful question is: low for whom, driven by what, and with what consequences? The answer varies dramatically depending on which segment you’re looking at.

National averages suggest a single mood. The reality is a patchwork of very different experiences – some groups struggling, others adapting, a few even thriving. Understanding why confidence is low means understanding that “the UK consumer” doesn’t exist.

This is why conversations about low consumer confidence in the UK often feel unsatisfying – they describe the outcome, not the underlying dynamics.

What UK consumer confidence indices report

The GfK Consumer Confidence Index – the most widely cited UK measure – has tracked below historical norms for an extended period. Occasional lifts have come and gone without establishing sustained recovery.

ONS data tells a similar story: consumers remain cautious, spending is considered rather than exuberant, and optimism about the future is muted.

This picture is accurate as far as it goes. The limitation is that these indices report a single national score, based primarily on questions about money. They tell you UK consumer confidence is low. They don’t tell you why it’s low, who’s pulling the average down, or what might shift it.

For that, you need to look at the forces beneath the headline – and at how differently they’re landing across the population.

The forces driving low UK consumer confidence

Cost of living has dominated the narrative, and it’s certainly part of the picture. But focusing on COL alone misses the broader web of pressures shaping how people feel.

Taken together, these pressures help explain why UK sentiment remains fragile even when headline economic conditions stabilise.

Konfidant’s data – based on 2,000 weekly interviews and six years of continuous tracking – points to five interconnected drivers:

1. Global unpredictability

People like certainty. They’re not getting it. Geopolitical instability, wars, the rise of AI, climate anxiety, unpredictable elections – the wider world feels chaotic in ways that are hard to process. The only predictable thing is uncertainty itself, and that’s exhausting.

Humans are wired to notice change – it signals danger. A stable problem, however serious, generates less anxiety than a shifting one. Right now, almost everything is shifting.

2. Domestic stagnation

Humans like to feel a sense of progression. That’s harder when the economy is sluggish, public finances are stretched, and systems feel increasingly broken. It’s not just that things are difficult – it’s the creeping sense that improvement isn’t coming anytime soon.

Loss aversion makes this worse. We feel the absence of progress roughly twice as keenly as we enjoy equivalent gains. Treading water doesn’t feel neutral – it feels like sinking.

3. Institutional distrust

In uncertain times, people look for north stars – leaders, organisations, institutions they can trust to help navigate forward. That trust has eroded. Whether it’s government, media, financial institutions or employers, confidence in those running things is thin. When you don’t trust the guides, the path feels harder.

4. Generational roadblocks

Traditional routes to security are closing down, particularly for younger adults. Student debt, a weak graduate job market, unaffordable housing – the established path to adulthood no longer works as advertised. And the older generation can see it too, worrying for their children while simultaneously fearing for their own retirement as government support thins.

5. Division and disconnection

There’s a general sadness that the country isn’t in great shape – but sharp disagreement about how to fix it. The result is people turning inward, shrinking friendship circles, withdrawing from community. Social fabric is fraying, and that feeds a quieter, lonelier kind of low confidence.

Cost of living sits within this web, not above it. It’s a symptom as much as a cause – and it’s landed very differently across the population, with wealthier households largely protected while others have absorbed the full impact.

Why “UK averages” mislead

A national confidence score is a blunt instrument when applied to UK consumer confidence. It can appear stable while very different things are happening underneath – opposing movements cancelling each other out, creating the illusion of stillness.

The pandemic made this starkly visible. At certain points, the headline average held relatively steady while wealthy and lower-income households moved in completely opposite directions. Higher earners began to enjoy lockdown life – working from home, investing in their living spaces, building savings. Meanwhile, those in cramped flats, in jobs that couldn’t go remote, without enough devices for children to attend online school, experienced something entirely different.

Traditional financially-focused indices made this harder to see, not easier. Because people had accumulated savings, financial confidence appeared healthy. But Konfidant’s data – tracking emotional wellbeing, vulnerability and connection alongside finances – showed a very different picture: people felt exposed, isolated and fragile. The financial cushion didn’t translate to feeling secure. When those traditional indices predicted a “roaring twenties” as restrictions lifted, our clients knew that wasn’t coming.

The average told you nothing useful. The segments told you everything.

A similar dynamic is playing out now. Families with children are, on balance, faring better than average – the busyness of daily life keeps them distracted from doom-scrolling, and the constant demands of parenting force adaptive behaviour. Necessity drives invention: changing jobs, improving the home, asking for a pay rise. Meanwhile, younger adults without dependents and older people approaching retirement are struggling more than the headline suggests.
If you only watch the average, you miss these divergences entirely.

Segment-level confidence insights

Certain patterns in confidence are enduring: money correlates with optimism, youth tends toward hope, men report higher confidence than women (who are, research suggests, more attuned to risk).

The more valuable insights lie in what’s changing.

• Young adults (under 25) are losing ground. Their baseline optimism is being eroded as traditional paths close down. Graduate programmes are rarer. Alternative careers sold as dreams – influencing, passive income – don’t pay the bills. There’s genuine uncertainty about which jobs will even exist in a decade. Confidence in this group is declining relative to historical norms.
  
• Their parents are anxious too. Partly for their children’s futures, partly for their own. The retirement they’d planned for is being reshaped by forces outside their control – reduced state support, shifting rules, limited time to adjust. This ‘sandwich generation’ is squeezed from both ends.
  
• Homeowners are pulling further ahead. The confidence gap between owners and renters has always existed – homeownership correlates with wealth, and wealth correlates with confidence. But the gap is widening. Lockdowns were more pleasant in owned homes. Cost-of-living adaptations – staying in, home-based socialising, digital entertainment – suit ownership. The divide is likely to grow.
  
• Regional differences largely reflect demographics. London appears more confident because it has more young people and higher earners. Rural areas less so because of older populations. The location itself matters less than who lives there – but tracking how regions shift over time can reveal emerging patterns.
  
• People with life plans are doing better. Having something to work toward – a goal, a project, a sense of direction – correlates with higher confidence. So does regular social contact. Those who see other people have their fears normalised and gain strength from connection. Those who’ve withdrawn feel worse.

The emotional undertow

Beyond the rational factors – money, jobs, housing – there’s an emotional current running through the data that’s harder to quantify but impossible to ignore.

The dominant feeling isn’t fear or anger. It’s uncertainty.

People feel like they’re falling behind, holding on and hoping for progress – often all at once. The mental load is draining. Energy that might go toward action is being absorbed by anxiety.

The result is a gap between intention and momentum. People have ideas – things they want to do, changes they want to make – but feel stuck. They’re hesitant to act when the ground feels unstable.

This creates a specific kind of opportunity. Brands that can help people move from thinking to doing – reducing friction, building confidence, making the next step feel achievable – are addressing a real emotional need, not just selling a product.

What low confidence means for behaviour

Low confidence doesn’t always translate directly into reduced spending – but it does change how people spend.

Right now, the bias is toward saving over spending. Discretionary big-ticket purchases – holidays, major upgrades – are being questioned more carefully. But treating hasn’t disappeared; it’s shifted. People are seeking small moments of joy, little experiences rather than things. Novelty is still valued, but the definition of a treat has changed.

The relationship between sentiment and behaviour is more complex than a simple correlation. Research that tracks both – and understands the gap between them – is more useful than research that assumes one predicts the other.

Should brands be worried?

If a brand asked whether low UK consumer confidence is cause for concern, the honest answer would be: it depends.

Yes – if you don’t know what’s behind the score. A headline number doesn’t tell you which of your customers are struggling, what’s driving their anxiety, or where they need help. Flying blind in a low-confidence environment is risky.

Yes – if you’ve forgotten your employees. Whatever’s hitting the population is hitting your workforce too. Low confidence isn’t just a customer insight issue; it’s an organisational one.

No – if you’re tracking the detail. Brands that understand segment-level shifts, that see the divergences beneath the average, that know which emotional needs are unmet – they’re not just surviving low confidence, they’re finding advantage in it.

The opportunity isn’t to wait for UK consumer confidence to return. It’s to understand, precisely, why it’s low and for whom – then respond in ways that genuinely help.