Over half of consumers in the UK say they feel under pressure to cut back on their spending at the moment, according to the latest Lloyds Bank Spending Power Report. In an Ipsos MORI survey of over 2,000 bank account holders in the UK, almost two-thirds (63%) of people expressed concern about current levels of inflation. Women and families appear to be most stretched – with 56% of females feeling under pressure to reduce their spending versus just 47% of men. Families, in particular, are feeling the pinch, with 60% of those with children saying they feel under pressure to cut back versus just 47% of those without children.
Amongst those who describe their household financial situation as tight, the most common areas where spending has been reined in (versus 12 months ago) are shopping for leisure (48%), socialising/entertainment outside of the home (46%) and non-essential groceries (43%). But they are far less likely to have cut back on entertainment subscriptions and personal electronic devices, with only 25% having done so in the last year.
With spending power reduced, almost 6 in 10 people (58%) say they now spend more time looking for the best deals before spending money on non-essentials, such as clothes or holidays, than they did this time a year ago. Women are the savvier shoppers, with almost-two thirds (62%) saying they are spending more time seeking out the best offers compared to this time last year (versus 53% of men).
When asked where they would most likely cut back on their discretionary spending if faced with less disposable income in 12 months’ time, people indicated that socialising/entertainment outside of the home (45%) and holidays/short breaks (44%) were the most likely areas.
Meanwhile, Lloyds Bank’s analysis of its own customer account data showed that the year-on-year growth in consumers’ essential spend for September was around 2%. This was the 16th consecutive month of year-on-year growth in essential spending.
Food, accounting for c.40% of all essential spend, had a year-on-year rise of around 2%, a sixth consecutive month of year-on-year growth. Fuel spend rose by around 5%, the 13th consecutive month of year-on-year growth but significantly down from the peak of around 13% seen in April this year.
Robin Bulloch, Managing Director, Lloyds Bank and Bank of Scotland said: “While the increase in consumers’ essential spending has been well documented in recent months, in times of rising inflation that only ever tells half the story. When paying more for everyday items like food and fuel, people are faced with tricky decisions on where to cut back in other areas. This often has an impact on lifestyle, and our research suggests that many may be foregoing the expense of a night on the town for an evening in front of the telly.
“It’s also notable that far from being a consistent picture, women and families seem to be feeling the strain more than most. However, they are also the savvier spenders, taking more time to seek out the best deals and offers.”