Half of consumers feel pressured to overspend in social situations

According to new research by online bank Marcus by Goldman Sachs, almost three fifths (59%) of consumers in the UK feel pressured to overspend in social situations, which is costing us an average of £270 a year.

The most common reasons why people said they felt pressured to overspend in social situations was because it was easier to just go along with it (40%), they didn’t want to appear ‘tight’ (35%), it wasn’t worth the argument (34%), and they were too polite to say no (33%).

‘FOMO’ is also denting our bank balances, with consumers spending an average of £526 a year on socialising with friends and family simply because they didn’t want to miss out. This number rises to £771 for men, compared to £286 for women. It’s the 45-54 year-old age group who spend the most because they fear missing out, shelling out an eye-watering average of £910 a year, compared to £688 for 18-24 year olds, £477 for 24-35 year olds, £247 for 35-44 year olds and £437 for over 55s.

Top 10 social spending regrets:

1. Paying a service charge despite poor service (30%)
2. Splitting a restaurant bill equally after deliberately choosing cheaper food/drink options (25%)
3. Buying a large round of drinks (20%)
4. Going on a night out (20%)
5. Contributing to gifts for work colleagues (19%)
6. Buying a fundraising or raffle ticket out of obligation (19%)
7. Paying for a taxi when public transport would have been preferred (17%)
8. Buying someone a present (16%)
9. Not asking for petrol money when driving friends/ family (12%)
10. Attending a wedding (9%)

Goldman Sachs said it’s clear that this social pressure can have a negative impact on our personal and financial wellbeing. Almost two fifths (37%) of people surveyed said that they worry about money as a result of overspending in social situations, more than a quarter (26%) dip into their savings to cover the extra costs and more than one in ten (13%) have gone into debt, leaping to 20% for 25 to 34-year olds.

As the nation gears up for the festive season, Marcus by Goldman Sachs has partnered with behavioural psychologist Dr Thomas Webb to explore this further and to help people navigate the potentially awkward money moments they may find themselves in.

Managing Director of Marcus by Goldman Sachs, Des McDaid, said “We all love to spend time with our family and friends, but especially at this time of year it can be easy to get caught up in situations where you end up spending more money than you wanted to, which can have a knock on effect on our finances.”

“Our research shows that this pressure costs us an average of £270 a year and that more than a quarter of us are having to dip into our savings pots to cover this excess.”

Dr Thomas Webb of The University of Sheffield said “People are social creatures and how we appear to others matters a great deal to us. So, it is easy to feel pressured into doing things to ‘save face’ and ‘keep up appearances’. However, sometimes we need to think about the long-term implications for our finances and find ways to better manage these pressures.”