UK households are feeling the financial pain of soaring inflation as the cost-of-living crisis bites on multiple fronts.
Inflation is at its highest for 40 years and, as a result, how much it costs to buy essentials is rising at an incredible rate.
The Office for National Statistics (ONS) published new figures this week showing that one of the key markers of inflation had increased for a ninth month in a row.
The consumer prices index (CPI) - a tool that tracks the price of 700 goods that households often purchase - stood at 9.4% in June, up from 9.1% in May.
When inflation rises, it means that your money does not go as far as it used to.
With wallets and purses fast being emptied to keep up with inflated costs, bread-winners are resorting to trimming the fat to afford the basics.
How are UK households cutting back in the cost-of-living crisis?
Abandoning foreign holiday plans, leaving the car parked on the drive, cooking meals from scratch and saying goodbye to Netflix are all ways consumers are looking to cut their cloth to save cash.
The trends were spotted by Barclaycard, which claims to see nearly half the nation’s credit and debit card transactions.
Barclaycard combined the hundreds of millions of customer transactions recorded in June 2022 with consumer confidence data to provide an in-depth view of UK spending for the month.
TV presenter and money expert Jasmine Birtles said the shifts in behaviours showed Brits are finding “hacks” in the face of increasing demands on their pay packets.
She said: “We are getting into clever cooking instead of just picking ready meals off the shelf and we are working out what we really need and want to spend on and what is just a nice-to-have.
“While having to think about budgeting is another thing to add to consumers' plates, small changes like these will be worth it and enable them to live day-to-day without having to raid their savings.”
10 ways to save money this summer
- No holidays abroad
As living costs increase, almost one in five say they are not going on holiday at all this year, while a similar proportion are opting for a holiday in the UK or “staycation” in a bid to save money.
- Cutting energy and water use at home
Energy bills could hit an eye-watering £3,300 on average this winter as the cost of living crisis continues to grip families.
Spending on utilities in June jumped almost 40% year-on-year and was 5% higher than in May.
In response, a little under half of Brits are cutting back on their energy and water consumption to keep costs down.
Tumble dryer use has fallen by a third and 55% of people are more conscious about turning lights off when they leave a room.
- Keeping the car parked up
With petrol and diesel prices at the pumps still climbing, driving habits are changing.
Barclaycards found half of motorists are walking more often and almost the same number are cutting back on long journeys.
One in four are opting to use public transport for journeys previously undertaken in the car.
- Savvier grocery shopping
Smaller shopping baskets are becoming a thing during the cost of living crisis.
Experts believe the shift to buying less but shopping more often is a way of monitoring spending more closely.
While the value of grocery transactions fell compared to last year, the volume of transactions grew by 6%.
A third of people say they are forgoing luxuries or treats while also buying budget or own-brand goods over the big brands to save the pennies.
- Binning Netflix and Spotify subscriptions
Digital and content subscriptions saw a month-on-month decline of minus 4.2% in June, as consumers become increasingly selective about their splurging.
A quarter of people said they were reviewing their subscriptions or cancelling one they can live without - up by 5% on those saying the same thing in May.
Among that group, 44% are making cuts to their film and TV streaming services, a third are cancelling paid-for TV channels and more than a fifth are sacking off music streaming platforms.
What could be bad news for Netflix and Spotify could be good news for charity store DVD and CD sections.
- Cooking from scratch
As would-be diners think again about eating out, homemade meals are on the rise.
A third of households are cooking meals from scratch to avoid buying lunch, going to restaurants or ordering a takeaway.
- Repairing, recycling and reusing clothes and accessories
The Repair Shop craftsmen and women would be proud - almost a third of people are making an effort to repair damaged clothing rather than dumping them and buying new outfits.
- Maximising use of discount codes and loyalty schemes
Loyalty cards and discount cards are massively in vogue again, with a third saying they had used one in the last month to get money off hot drinks, clothing and meals out.
Women proved slightly savvier in that respect, with 35% saying they’d look to snare a freebie via loyalty schemes, compared with 24% of men.
- Eating into lockdown savings
Lockdown meant less spending on rounds at the bar, taxis and eating out while social distancing was in place, giving many households a healthy savings pot to show for it.
But with prices rising on so many fronts, Brits say the value of their piggy banks has dropped.
Those surveyed said the need to dip into money they saved up during lockdown increased from 13% to 17% last month.
- Money management changes
Habits are shifting as people become more anxious about their personal money.
More than one in eight said they were looking to make alterations to how they manage their cash, with half of those checking their bank balance more often and a third taking a closer look at where their direct debits are going.
