From re-using back-to-school items to starting side hustles, new data from Barclaycard has discovered how people across the UK are changing their spending behaviour to make their money go further during the cost of living crisis, while also trying to make the most of the last days of summer.
Inflation continues to hit decades-long highs, hitting 10.1% in July, while energy bills continue to soar and put additional pressure on millions of households across the UK. The final price cap prediction from Cornwall Insight, ahead of Ofgem’s official announcement later this week, suggests a staggering increase of 80 per cent on the current cap of £1,971 to £3,554 from October 1.
Insights are taken from Barclaycard’s monthly Consumer Spending Index, which combines the hundreds of millions of customer transactions recorded in July 2022 with consumer confidence data to provide an in-depth analysis of UK spending.
To help people to find more ways to cut outgoing costs and keep afloat in these challenging financial times, Barclaycard’s monthly Consumer Spending Index, which combines the hundreds of millions of customer transactions recorded in July 2022 with consumer confidence data, provides an in-depth analysis of UK spending - and could inspire you to adopt one or two of these money-saving strategies.
10 summer-saving behaviours during July 2022
Re-using back-to-school items
The new school year is upon us and Barclaycard found that 25 per cent of parents are choosing to re-use items from previous years as opposed to the 60 per cent opting to buy new clothing, footwear and accessories.
A further one in five (21%) plan to donate their children’s old uniforms to others who can’t afford to buy new items
Starting a side hustle
In efforts to manage the cost of living crisis, nearly one in 12 (8%) people across the UK have taken on an extra job or side hustle to create a second income. While some jobs are more conventional, such as babysitting, selling clothes online or tutoring, others have been more adventurous - taking up fishing, crocheting and marking exams to top up their funds.
Savvier money management
Nearly one in eight (12%) people have changed their banking or money management habits in response to the rising cost of living.
Almost three-fifths of this group (58%) are checking their bank balance more often, two-fifths (39%) are hunting for cashback offers and discounts through their work or subscription packages, and over a third (36%) are reviewing receipts more closely to keep an eye on price changes for items bought regularly.
In addition, some of these savers are looking ahead to the winter energy price hikes, with one in five (21%) planning to start setting aside money for Christmas much earlier than usual.
Returning to in-store shopping
After a surge in online shopping during the pandemic, consumers are increasingly returning to the high street, possibly in an effort to gain more control over their spending and ‘try before they buy’ to avoid unnecessary purchases.
In-store shopping grew faster than online in July, with the value and volume of face-to-face transactions up 8.5 per cent and 12.9 per cent year-on-year respectively.
By comparison, online shopping saw a smaller 6.6 per cent rise in the amount spent, and a -3.3 per cent decline in the total number of transactions.
Smaller shopping baskets
At the supermarket, people are using smaller basket sizes as a way to keep better track of their budget throughout the month.
Nearly two-fifths (37%) are purchasing certain items on a need-to-buy basis to save money and avoid waste, resulting in an emerging trend for smaller baskets, and more frequent trips to the supermarket to restock when items run out.
The average value of a supermarket transaction has dropped from £23.67 in January 2021 to £19.33 in July 2022, while the average number of monthly supermarket purchases per person increased from 8.70 to 11.91 over the same period.
Seeking more value from the weekly grocery shop
Almost nine in 10 (89%) of shoppers report seeing increases in the prices of everyday items at the supermarket, with the majority noticing that butter (53%), milk (51%) and meat (47%) are more expensive than in June.
We have a full break down of the most common food items and how much they increased last month when inflation rose to 10.1% here.
As a result, 45 per cent of shoppers report looking for ways to get more value from, or to reduce the cost of their weekly shop.
Over half (52%) of this group are paying closer attention to the prices of items they buy regularly, and the same proportion are cutting down on luxuries or one-off treats for themselves.
In addition, almost half (47%) have been opting for budget or own-brand goods over branded items.
Cutting back on summer socialising
Inflation, the hot weather and school holidays all boosted discretionary spending in July, especially for clothing retailers and pharmacy, health and beauty stores.
However, demand for eating and drinking out slowed due to the cost of living squeeze, with the category seeing a slight decline of 1.5% in spending compared to June.
This is likely because almost one in three (29%) people plan to spend less on social plans and days out this year, with 67 per cent of this group cutting back on eating out at restaurants, and 55 per cent spending less at pubs, bars and nightclubs.
Conserving water and energy at home
Average spending on utility bills rose 43.9 per cent year-on-year in July, even higher than the previous month’s growth of 39.6 per cent.
No surprises that over two-fifths (41%) are looking for ways to save energy and water at home.
Almost 79 per cent are turning off lights when they leave a room,59 per cent are washing clothes on lower temperature settings, half are taking shorter showers, and a quarter are batch cooking.
Staycations over holidays abroad
Rising living costs and airline disruptions are the likely cause of one in five (20%) of people across the UK deciding against a summer holiday this year, however, 16 per cent have saved money by opting to take a break in the UK instead.
Reducing car usage
Increasing petrol and diesel prices led to a 29.9 per cent jump in fuel spending in July compared to the same period in 2021.
In response, a quarter of motorists (26%) are looking to reduce the amount they travel by car. Of this group, almost three in five (57%) are walking more, over half (53%) are taking fewer long journeys, and a quarter (24%) are using public transport more.
Commenting on the latest findings, Jose Carvalho, Head of Consumer Products at Barclaycard, said: “The summer months are some of the year’s most expensive, typically filled with holidays, weddings, and parents needing to keep children entertained.
“This year, the cost of living crisis has squeezed budgets much further than usual, so consumers are having to find even smarter ways to cut back and save money.”
He continued: “I’m pleased to see that more Brits are feeling confident about their household finances, showing that many have been able to budget and manage their money sustainably, however, this could change as we head into an uncertain autumn and winter period where energy bills are expected to increase further.
“Continuing to adopt a range of money-saving habits will remain key to helping Brits navigate this challenging period.”
Barclays is providing a range of support to customers as the cost of living rises. To find out more go to barclays.co.uk/money-management/.
To keep up to date with the cost of living crisis, join in the conversation on our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out three times each week - sign up here.
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