Nationwide poll reveals money worries ‘peaking’ but spending still on the rise
Household money worries are on the up as spending continues to spiral, according to a survey from Britain’s biggest building society.
The latest research complied by the Nationwide from 2,000 respondents found that 69% of those surveyed are concerned over the personal finances, and their ability to cover essential costs.
The poll highlighted that the level of pessimism over finances was rising, as in August and July a smaller total of 62% and 57% respectively were worried about making ends meet.
A third of the respondents said that they were left with £100 or less in their account at the end of each month. Nearly one-in-ten of those asked went further in saying that they no money at all in their account’
The survey also found that the average credit card debt has now reached £8,000.
Spending rise by 5% in August
The Nationwide Spending Report revealed that around £8.75bn was spent in August, in a monthly analysis of more than 241 million debit card, credit card and direct debit transactions.
This was an increase of 5% in comparison to the previous year, while the volume of transactions grew by 6% annually. However, the spending in both categories was actually down 1% compared to July.
Essential spending climbed to £4.34bn, a 3% increase compared to August last year.
Meanwhile, the number of essential spending transactions also grew, as the volume of essential transactions reached 122 million, an increase of 7% from August a year ago.
Unsurprisingly, in the current climate of higher interest rates, mortgage payments rose by an annual 11%. There was worse news for rental costs which grew by 19% year-on-year.
It was also found that paying off loans was reduced by 5% year-on-year, while repayments to credit cards increased by the same amount.
Discount stores and public transport on the rise
Discount stores can celebrate an increase in footfall, as spending increased by 28% year-on-year in August. The number of transactions at the stores jumped by a higher 43%, as customers increasingly looked to stretch their money further.
Public transport has also become more popular, as there was a 6% leap in spending and a 12% rise in transactions to get around on busses, trams and trains.
Non-essential spending grew by 5% year-on-year to reach £3.25bn. The number of transactions rose by 110 million, which was up 5% against August last year.
As the sun failed to shine for most of this summer, digital goods were a popular purchase as consumers looked for indoor activities. Outlays on console games and e-books increased up to 29%.
The wet weather also led many to book overseas holiday to try and enjoy sunnier climes, there was a significant 23% spending increase on airline travel due to many last minute bookings.
Meanwhile, DIY and home improvement projects are being put off as the higher cost of living still has a heavy impact on households, Nationwide found.
Spending on the sector decreased by 9% and the number of transactions fell by 23% over the same period in August.
Money concerns ‘have peaked’
Mark Nalder, payments strategy & performance director at Nationwide Building Society, said: “Money worries have peaked this year, which is perhaps not a surprise after many people juggled the expectation to spend during the summer with continued high living costs.”
“As we enter the autumn, households will hope for some respite before the return of colder weather and the need to heat homes once again. While energy costs have dipped from their peak last year, the return of high utility bills will not be a welcome sight for many.
“Just as we saw last year, we expect many to cut back into their discretionary spending in order to manage their budgets.”