With the decline of Omincrom and some early signs of spring, for a while, things seemed to be looking up. But just when we’re starting to think life might be returning to ‘normal’, the cost-of-living crisis threatens to derail Britain’s post-covid recovery.
On the day the media dubbed ‘Black Thursday’, Ofgem announced that the energy price cap would increase by a record 54%. The Bank of England followed hours later with an announcement that interest rates would soar to 0.5%. Sadly, this double whammy means millions of households across the UK will face fuel poverty and even more financial hardship this year.
Even with Rishi Sunak’s measures to ‘soften the blow,’ national insurance hikes and soaring inflation will make 2022 yet another tough year for many.
And as if that wasn’t enough, Tesco Chairman, John Allan has warned the worst of food price hikes are ‘yet to come’ – predicting an increase of 5% this spring.
Some good news would certainly be welcome right about now.
Given this recent series of events, it would be fair to say that Kirstie Allsopp’s comments suggesting young people are ‘refusing to make sacrifices’ to get a foot on the property ladder were unfortunately timed.
It’s young people (specifically those under the age of 30) who it’s believed are the most financially vulnerable and will be hit hardest by the changes.
Mortgages and other debt will become increasingly expensive, and banks are likely to tighten up on lending, making it harder for many to get even a glimpse of that elusive property ladder.
So how will consumer finance brands attract new customers in a time of so much uncertainty?
- Functionality is obviously key. Can consumers earn money by switching, will they receive cashback on their everyday purchases? At times like these, financial rewards are big drivers. But consumers also want to connect with brands they believe share their values.
- Although times are tough, the cost-of-living crisis offers an opportunity for brands to reach an audience looking for solutions.
- Being sensitive to the change in circumstances many face over the next year or two and offering relevant information and advice is key.
- But purpose will become more essential than ever – now’s the time for banks and other businesses to tell consumers why they’re the brand for them. Customers will want to interact with providers who they believe truly understand the issues they face day-to-day and will help them to navigate this particularly challenging financial environment.
Sadly, 2022 isn’t going to be all roses for many families but brands certainly have a responsibility and role to play in helping them survive this latest crisis the best they can.