OPINION8 April 2024

How brands can support consumers in the cost-of-living crisis

Cost of Living Opinion UK Wellbeing

The cost-of-living crisis is having a profound impact on people’s mental health. Kim Lambert looks at five insights about how squeezed living standards are affecting consumers and brands’ role in supporting customers.

Empty wallet

Much has been written about the impact of the cost-of-living crisis on people’s ability to put food on the table and pay their rent. But these immediate and tangible impacts are only part of the picture – it’s also having a hugely detrimental effect on the UK’s mental health.

UM’s insights team and Dynatas Consumer Panel carried out a survey of 2,000 adults recently for the Money Talks campaign, in partnership with MoneySuperMarket and suicide prevention charity Campaign Against Living Miserably (CALM), looking into this very issue.

The findings were stark: more than a fifth of UK adults have felt reduced self-worth ( 22%) and hopelessness ( 22%) over their finances. More alarming, CALM has recorded a 45% increase in calls to its helpline since the start of the crisis and the number one reason is money worries.

This puts the onus on business leaders to look after their customers in a tough economy.

Fortunately, there were five key insights that emerged, which could be used to direct strategy for brands and marketers that want to start productive conversations around personal finances and mental health.

1 )     The anxiety over money is very real – especially among vulnerable groups

The Money Talks research found that more than half of consumers ( 52%) agree or strongly agree that the cost-of-living crisis is making them anxious.

These struggles were particularly acute for younger people and disenfranchised and minority groups. Whereas 42% of UK adults said the crisis was negatively affecting their mental wellbeing, that rose to 50% of those in low-income households, 53% of those aged 18 to 24, 59% of single parents and 58% of the LGBTQ+ community.

The impact on those under aged 45 was notable, as it soon became clear that younger generations are being squeezed by high interest rates and usually have no nest egg to fall back on.

2 )     People don’t talk about their financial woes

Three-quarters of consumers ( 75%) said they have not spoken to anyone about their concerns around money. Reasons included not wanting to worry friends or family ( 30%), feeling uncomfortable ( 16%) or being ashamed ( 15%). Again, under-represented groups scored even higher.

In fact, incredibly, the research highlighted that more people would be comfortable talking about a gambling problem or infidelity than about their personal finances. 

Outside of friends and family, it may also be a factor that the growing lack of trust in governments, non-governmental organisations and the media is affecting consumers’ willingness to be open about their money worries. In an age of division, disinformation and deepfakes, there may appear to be fewer welcoming places for stressed and anxious people.

3 )     People want advice and are willing to listen to brands

That said, this wider lack of trust is where there may be a place for brands to proactively step up and fill the gap. Three-quarters of consumers ( 74%) said they would welcome financial tips from brands, rising to 85% of single parents and 87% of those aged 18 to 24.

Retail and finance were the sectors that scored highest when people were asked to consider the brands that are most helpful when it comes to the cost of living – yet in each case still only a quarter ( 25%) agreed that brands in those industries were doing enough.

In fact, more than half ( 57%) feel that brands could do more to help consumers. There is an appetite for safe spaces and open conversations.

4 )     Brands will have to earn consumers’ trust

However, if businesses aren’t credible and trustworthy in their motivations when it comes to offering financial help, people will be put off – and call them out in the process.

This is why brands will have to be authentic and transparent. This is absolutely not the time for them to obfuscate the fact that they’re using artificial intelligence in their content, or to massage their sustainability credentials. The more honest they are, the better chance they have of reaching disenchanted and disenfranchised audiences.

That also means understanding where those audiences are now – the sacrifices and trade-offs they’ve had to make due to high costs and the impact it has had on their mental health.

5 )     Tone of voice matters when you’re building a community

The opportunity exists for brands to build a greater sense of community among consumers, especially in such a divisive media environment. The cost-of-living crisis is a shared experience, albeit a negative one, and that gives brands the opportunity to build meaningful connections by bringing people together.

It actually worked well during Covid-19, the last negative experience we were all forced to share, so this isn’t new territory. Brands already know how to create a sense of membership and belonging to build stronger ties in troubled times.

It’s about sensitivity and empathy. For example, 61% of consumers want brands to focus on how they provide value (e.g. through special offers). Aligned to this, around half ( 49%) want to see helpful advice such as tips on how to save.

At the same time, 60% want increased sensitivity to the struggles so many people are facing. Tonal considerations are going to be more important than ever.  

The good news is that people want safe spaces and conversations about their finances, and they’re very open to engaging with brands on this topic. It’s now up to the brands themselves to open the door that consumers are pushing against.

Kim Lambert is group insight director at UM