British households are tightening their budgets significantly, managing to save an average of £1,411 this year by reducing discretionary spending. This shift comes as living expenses continue to rise, prompting 83% of surveyed adults to cut back on non-essential items, according to a recent survey of 2,000 individuals. Key areas of reduction include holidays and social outings, with respondents reporting average monthly savings of £117.60.
Many families are opting for more affordable grocery options, cancelling television subscriptions, and purchasing fewer new clothes. The pressure to save has also led 35% of participants to sell old clothes, while 28% have explored investment opportunities, and 21% have initiated side hustles. Nearly half of the respondents, or 45%, plan to allocate their savings from these cutbacks to manage increasing costs, while 29% intend to use the funds for essential purchases.
Concerns about the financial landscape are palpable, with 64% of those surveyed attributing their cutbacks to rising costs. Additionally, 20% expressed anxiety over potential tax increases, and 38% fear they may find themselves in a worse financial position following the upcoming budget. A significant number, over a third, are worried about affording Christmas this year.
Consumer Behaviour Shifts Amid Economic Pressures
The research was commissioned by electric car manufacturer Leapmotor in light of the launch of its latest SUV, the B10, priced at £29,995. This model is positioned as a budget-friendly option in the mid-sized SUV market, competing with vehicles like the Kia Sportage. Damien Dally, UK managing director of Leapmotor, noted, “A car is a necessary purchase for many, but we appreciate it’s not a small financial outlay. With the potential introduction of a pay-per-mile electric vehicle tax, drivers may be put off making the switch to electric now.”
Recent discussions regarding a proposed EV fuel duty, which could impose additional fees based on annual mileage, have deterred 28% of Brits from considering electric vehicles. Despite these concerns, 45% of respondents indicated they would consider switching to an electric car if the initial and ongoing costs, including charging, were lower than their current fuel expenses.
Dally further emphasized the financial pressures faced by households: “Money is tight for many, and the speculation surrounding the Budget is only making people worry more. Brits are cutting back on ‘luxuries’ and building up a kitty for life’s essentials.” He encourages consumers to explore smarter, more affordable choices that do not compromise on quality.
Strategies for Saving
The survey revealed a variety of strategies that individuals have adopted to trim their spending. Among the most common adjustments are spending less on dining out, reducing takeaway orders, and cutting back on online shopping. Others have delayed significant purchases, utilized cashback or discount applications, and switched to less expensive grocery stores.
Many households have also opted for more modest vacation plans, with fewer nights out with friends and family. The trend towards sustainability is evident, as more consumers shop in charity shops and purchase second-hand clothing through platforms like Vinted. This shift in consumer behaviour reflects a broader effort to adapt to the economic climate while maintaining quality of life.
As the cost-of-living crisis continues, the actions taken by British households highlight a significant shift in spending habits. With financial pressures mounting, individuals are increasingly prioritizing essential expenditures while seeking ways to save, illustrating resilience amidst challenging economic conditions.
