According to interesting insights from Makala Green and Esme Harwood, Financial Experts at Barclaycard, Brits are changing their spending behaviour to ensure they are able to cover rising utility bills this autumn and winter.
According to the report, “This comes as average spending on utility bills increased by 48.0 per cent in September – higher than the growth seen in August (45.2 per cent) and July (43.9 per cent) – with nine in 10 (91 per cent) consumers feeling concerned about the impact of rising household bills on their personal finances.
Insights are taken from Barclaycard’s monthly Consumer Spending Index, which combines the hundreds of millions of customer transactions recorded in September 2022 with consumer confidence data to provide an in-depth analysis of UK spending.
10 cost-saving behaviours;
- Looking for ways to save energy at home
To ensure they can afford rising households bills, 65 per cent of Brits are finding ways to save energy at home – a significant increase on the proportion who said this last month (45 per cent). Of these Brits, 68 per cent are turning off lights when they leave the room, almost six in 10 (57 per cent) are wearing more layers, and over half (54 per cent) are boiling only as much water as they need, rather than a full kettle.
- Cutting back on unnecessary purchases
In September, spending on non-essential items grew just 1.0 per cent year-on-year, significantly less than last month (3.6 per cent), and a new low since February 2021 (-17.5 per cent) when the second Covid-19 lockdown measures were still in place.
This is likely due to the fact that almost a third (32 per cent) say they are assessing whether every individual purchase is necessary amid the cost-of-living squeeze. Meanwhile, of the two thirds (67 per cent) who are looking to reduce the cost of their weekly shop, 30 per cent are only buying some items on a need-to-buy basis to save money and avoid waste.
- Saying no to new clothes and meals out
Over half of Brits (53 per cent) are planning to cut down on discretionary spending to be able to afford their energy bills this autumn and winter. Of these consumers, six in 10 (60 per cent) are reducing the amount they eat out at restaurants, a similar proportion (59 per cent) are cutting down on buying new clothes and accessories, and just under half (47 per cent) are spending less on drinking in pubs, bars and nightclubs.
This perhaps explains why clothing retailers, after falling into decline in August (-1.9 per cent), saw an even sharper drop in September (-4.1 per cent). Restaurant spend (-12.2 per cent) also fell further than the previous month (-11.4 per cent), and bars, pubs and clubs slipped into the red (-0.4 per cent) for the first time since March 2021.
- Enjoying more evenings at home
To save money, over half of Brits (51 per cent) are planning to spend more evenings at home over the coming months; opting to play board games (25 per cent), stream films and box-sets (20 per cent), and play video games (19 per cent) instead of going out.
This, combined with the arrival of autumnal weather, perhaps explains why some “insperience” categories enjoyed a boost in September. Spend on takeaways and fast food saw its highest rise (10.1 per cent) since March this year, while digital content and subscriptions, including gaming and sports streaming services, saw growth (1.6 per cent) for the first time in eight months – possibly tied to new video game releases such as ‘FIFA 23’, or pre-orders for popular titles such as ‘Call of Duty: Modern Warfare II’.
- Closely monitoring bank balances and in-person services
38 per cent of Brits have changed their banking or money management habits in response to the rising cost of living – a significant increase on the 17 per cent who said this last month.
Of this group, 70 per cent are checking their bank balances more often, 46 per cent are checking their receipts more closely to keep an eye out for price increases, and 30 per cent are keeping their paper receipts so they have a record of what they’ve spent.
Another popular technique used by four in 10 (39 per cent) Brits is cutting back on regular in-person services. A third (32 per cent) of this group have cancelled visits to the hairdresser, 23 per cent have postponed window cleaning services, and 22 per cent have cancelled a gym or sports club membership.
- Saving and stocking up for the festive period
With the festive period fast approaching, four in 10 (39 per cent) have already started putting money aside for Christmas, to ensure they have enough saved for gifts and get-togethers.
In addition, almost half of Brits (48 per cent) are taking precautions due to concerns about products running out of stock earlier than usual, including stocking up on food with a long shelf-life and being more proactive with buying Christmas presents (both 21 per cent). 6 per cent have even pre-ordered their Christmas turkey already.
- Leaving luxuries behind
Supermarket shopping only saw a small uplift (2.8 per cent) compared to September 2021, as 67 per cent say they are looking for ways to get more value from, or to reduce the cost of their weekly shop. One of the most common ways for this money-conscious group to save is by cutting down on luxuries or one-off treats for themselves (40 per cent). Similarly, one in five (19 per cent) say that they are no longer able to afford small luxuries as a pick-me-up.
- Choosing packed over premium lunches
A third of workers (29 per cent) are now taking a packed or home-made lunch into the office, instead of buying food on-the-go, while a similar proportion (28 per cent) are cutting back on treats at work, such as coffees and snacks. One in eight (13 per cent) are even skipping meals at work altogether.
- Working from home to save on travel
In September, fuel spend saw its lowest growth (11.1 per cent) since March 2021. This was likely due both to the recent decline in petrol and diesel prices, as well as the fact that many Brits are reducing car journeys to save money, with 14 per cent currently choosing to work from home more often to save on travel.
A similar proportion (13 per cent) of workers say they have started walking or cycling to work instead of driving due to rising fuel costs, and more than one in 10 (12 per cent) have started to commute by public transport for the same reason.
- Prioritising pets over personal spending
Despite rising costs, animal-loving Brits continue to put their pets at the top of their list of priorities when it comes to personal spending. Of the half of consumers (51 per cent) who own a pet, two in 10 (17 per cent) say they are spending the same amount on pets compared to last year and one in 10 (9 per cent) say they are spending less on themselves so that they don’t have to reduce spending on their pets.
Nevertheless, some pet owners are having to hold back on pet-related purchases as a result of rising prices, with 8 per cent reducing their pets’ treat budget, and a similar proportion (9 per cent) buying cheaper or discounted pet food for their furry friends.
Esme Harwood, Director at Barclaycard, said: As the colder weather starts to set in and energy bills continue to rise, Brits are facing even tougher decisions about where they focus their spending. As a result, discretionary purchases like meals out and clothes have become less of a priority.
“However, Brits are still keen to have a good time while they save money, particularly when it comes to nights in. The increase in spending on digital content and takeaways in September reflects this, and could be a trend that continues into the festive period.
“Elsewhere, consumers continue to take a resourceful approach to money management – including putting aside money for Christmas – which will become even more important for weathering the unpredictable months ahead.”
Makala Green, Financial Expert, said: “From making packed lunches to cutting back on pet-related purchases, Brits are adopting all kinds of tactics to curb their spending during the cost-of-living squeeze. Limiting little luxuries and pick-me-ups, such as coffees and snacks, is an increasingly popular way to save money, as is working from home to save money on travel.
“With the festive period just around the corner, consumers will already be thinking of ways they can spread the cost and avoid missing out on desired items due to potential stock issues. Hopefully the money-saving hacks they have picked up over recent months will also come in handy during this typically expensive time.”