The quarterly survey asks consumers how the feel about job prospects, their own personal finances, spending intentions and major concerns. It shows the confidence index fell two points to 78 in the last three months - the first fall since April 2009.
Prior to this latest survey, confidence levels had made a slow, but steady improvement over the previous four quarters.
Concerns over the economy have shot up, with 39% of people citing this as their first or second biggest concern (up from 27% in March). The focus on the country's economic predicament during the election campaign in April and early May is likely to have brought this to the forefront of consumers' minds and driven the increase.
The next biggest concerns were debt and job security.
Seventy-one per cent of respondents think their job prospects over the next year will be ‘bad' or ‘not so good'. Over half say the same about their personal finances.
The survey also reveals that 82% of people believe the country is still in recession. While that is down slightly from 84% in March, a much smaller proportion thinks we will be out of recession in a year's time.
In March 44% thought Great Britain would not be out of recession within 12 months. That figure has risen to 52% in this survey.
Justin Sargent, group managing director, Nielsen Consumer, UK & Ireland, commented:
"Our survey tells us that consumers are starting to feel more worried about jobs and money and debt and this is a concerning turn of events.
“Many economists have talked about a ‘double dip' recession and the results of this survey would suggest we are at a crucial point in the consumer's mind. Hopefully sentiment will stabilise and this will turn out to be a minor fluctuation on our road to recovery.
"Recent employment figures were positive and interest rates remain low which helps people feel more secure but the fact that ‘saving' remains the number one thing consumers say they do with their spare cash indicates that people are making concerted efforts to build themselves some additional security."