2018 due to be the year of the ‘savvy spender’
Rising inflation, Brexit, the NHS and making ends meet are the top concerns for young people, leading them to slash their spending. According to the latest Lloyds Banking Spending Power Report, 60% of consumers said they changed their eating and going out habits since the start of the year.
A third of 25-34 year-olds have taken to eating in rather than going out to restaurants, which is significantly higher than the proportion of those aged 35+ who claim to have done the same (25%).
More than half (54%) also claimed to have made changes to their buying habits, with 34% reducing spending on clothes and personal care items. One in five said they’ve turned to voucher codes and discount websites and 27% of 18-34 year olds claim to have used them more than in each of the previous three months. In comparison, less than a fifth (17%) of 35+ year-olds have done the same with discount sites.
Given the cut backs, the average consumer claims to have reduced their spending by £21.53 a week since the turn of 2018, the monthly Ipsos MORI survey of over 2,000 bank account holders in the UK showed.
Lloyds Bank’s analysis of its own customer data showed that people are continuing to spend more on essentials – rent, mortgage, debt payments, utility bills, council tax, TV licence, food and fuel.
The year-on-year growth in consumers’ essential spending for December was around 3%. Food accounted for c.40% of all essential spend, and had a year-on-year rise of 2%. Fuel spend rose by just over 4%. Gas and electricity also rose to just over 4%, the sixth consecutive month of spending increase, following over three years of decline.
Robin Bulloch, managing director of Lloyds Bank, said it’s clear many young people are concerned about the pressure on their finances in 2018 and are looking at ways to reduce their outgoings: “Away from the age divide, this month’s survey shows consumers are more concerned with the state of the UK economy than they were a year ago. From January 2017, pessimism towards the UK housing market and inflation has risen 8 percentage points and 13pp respectively. This may have impacted people’s perception of their own financial strength, as only one in five think they will have more money in six months’ time.
“Among this group, however, spending is not the priority with around 40% using some of this extra cash to pay off existing debt and three in four (74%) saving for a rainy day.”