Spending rises as household bills fall

Spring optimism saw households spend more on the things they want in March as year-on-year essential costs began to fall, Nationwide’s Spending Report shows.

The situation, likely aided by warmer weather and stabilising costs, saw discretionary spend increase across gardening, meals out and holidays at the same time costs reduced across areas including debt, utilities (including energy bills) and childcare.

However, Nationwide’s Spending Report, an analysis of more than 235 million debit card, credit card and Direct Debit transactions – shows c.£7.5 billion was spent overall in March. Spending overall was flat compared to the previous year, although transactions were up five per cent.  

The amount spent in March reached around £4.2 billion –four per cent down compared to the previous year, although the volume of transactions (c.121m) was up three per cent. Brits reduced spending on debt repayments (-8%), discount stores (-5%), childcare (-3%), utilities (-2%) and television, phone and broadband (-1%). However, spend on housing continued to rise with renters seeing a 24 per cent increase compared to March 2023, while mortgage repayments increased 11 per cent year on year.

 £3.3 billion was spent on non-essential spending this was up four per cent on last March while the number of transactions (c.113.5m) was up six per cent. After a cold, notably wet winter, the start of Spring has seen many Brits start venturing back into their gardens to plant bulbs and seeds, mow the lawn and generally spruce up their outside spaces. Nationwide customers spent nearly £27.5m on gardening in March – a 16 per cent year-on-year rise and a 53 per cent increase on the previous month. The warmer weather and early Easter also gave a boost to the hospitality sector as spend on eating and drinking out was up 12 per cent year-on-year. Spending increased across multiple categories including: general retailers and department stores (+9%), charity donations (+8%), leisure and recreation (+7%), health and beauty (+6%) and holidays and airline travel (+5%).

Mark Nalder, Nationwide’s Payments Strategy Director, said “After the wettest winter on record, Brits have made the most of the early Easter – and warmer weather – to get back out in the garden and socialise with friends, leading to a boost in non-essential spending. Cost-of-living pressures are starting to ease, meaning some people have more disposable income to spend on luxuries. However, we realise that some people are continuing to struggle, which is why we offer a range of tailored support for those facing financial difficulties.”