Consumer confidence is on the up - but far more households are worried now about their finances than they were a year ago.
According to the Which? Consumer Insight Tracker, a monthly monitor of how consumers are coping in the current financial climate, confidence is rising, with 31% expecting the economy to improve in the next year, up from 21% last September.

However, the cost of living remains one of the biggest concerns for consumers. Three quarters are worried about energy (79%), fuel (79%) and food prices (73%), which have remained high throughout the year. And 55% of consumers are worried about the level of their savings.

The figures show, says Which?, that a million more households are now feeling under financial pressure than a year ago.

How people are spending their money has also changed. Last year they were most likely to use their savings to pay for a holiday. Now, holidays have fallen into fourth place, with 3.5m households using their savings to pay for essentials like food or household bills.

Which? executive director Richard Lloyd said: "The cost of living is clearly top of the agenda for consumers. While people have started to become more optimistic, times remain tough with the price of essentials spiralling up and incomes stagnating. Expensive credit, not saving, is the fallback for many."

Which? also found that 31% of people are finding it difficult to live on their current income and 33% always or often run out of money at the end of each month. Two thirds believe the economy is hurting their own financial situation, and six in 10 describe the economy as poor, with 29% thinking it will get worse in the coming 12 months.