Lloyds Bank latest Spending Power Report has given a glimpse into the financial impact of the UK consumer’s daily commute. 84% have seen their commuting costs either stay the same or increase over the past 12 months, and one in five (18%) believe that the amount they are spending on this is causing them to struggle financially.
The youngest generation of commuters feeling the most pressure from the unavoidable outlay, with one in four (24%) 18 to 34 year olds suggesting their commuting costs are behind their financial woes. A significant proportion of renters (20%) and parents (27%) feel the same.
Concerns around commutes are so great, that 26% of people choose where to live based on the cost of the commute from that location. With more flexibility to move around, renters (31%) are more likely than buyers (25%) to use commuting costs as a determining factor when deciding where to live. Nearly a third (31%) of parents likewise will base their choice on this criteria. It is well documented that rail prices have increased significantly over recent years; however the alternatives still continue to come at a price. Lloyds Bank analysis of its own data shows fuel spend has risen by over 7% year on year in June 2018, increasing the cost of using a car and leaving consumers with few alternatives.
And the situation is unlikely to improve in the future, with 82% of commuters expecting their costs to either increase or remain static in 12 months.
Robin Bulloch, Managing Director Lloyds Bank, said “Commuting costs often make up a significant portion of an individual’s outgoings, and so it’s understandable that many feel it directly contributes to their financial struggles. However, there are many ways that people can lower their travel costs such as car sharing, discount railcards and cycle to work initiatives. Keeping up to date with the latest money saving methods could cut commute costs significantly.”
The public’s outlook on the UK economy remains cautious, according to our research. 57% of adults continue to worry about the current level of inflation, and 62% are concerned with the country’s financial situation. In fact, 79% of households believe that their disposable income will not increase in the next 6 months, up 4 percentage points from this time last year.
To add further to these concerns, our data* also shows increased year-on-year spending on essentials. Gas and Electricity spend is up nearly 6%, slightly higher than the previous two months. Food, accounting for c. 40% of essential spend, saw a year on year rise of over 1%.