Money Wellness
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category iconcost of living
calendar icon15 Apr 2024

Half of people had to cut non-essential costs in first quarter of 2024

Half of people have cut non-essential spends in the first quarter of the year, and are four times more likely to save than spend, new research from KPMG UK finds.

 KPMG UK’s Consumer Pulse survey measure confidence and spending behaviour of 3000 people across age and income groups and UK regions every quarter.

50% of respondents have said that their essential cost levels have meant that they have had to cut their non-essential spend in the first quarter of the year.

The most common cuts were made to eating out (72%), clothing (62%), and takeaways (58%), and it was highest in London.

Four in ten people also reported that their non-essential spending levels so far this year have remained the same as when 2023 ended – but only 3% said that they had been able to spend more money on non-essentials in the first quarter of 2024.

What would people do if prices dropped?

  • 47% said that they’d put the money into savings
  • 20% said they’d put the money toward essential costs (mortgage/rent, energy, fuel, food)
  • 11% said they’d increase non-essential spending
  • 14% weren’t sure

Responding to the findings, Linda Ellett, UK Head of Consumer, Retail and Leisure for KPMG, said “Essential costs remain at a level where nearly half of the consumers we surveyed said they have cut their non-essential spend in the first quarter of the year.  Most of the remainder are spending at the same level as they were at the end of last year, but only 3% said they’ve been able to increase their discretionary spending.

“Should macroeconomic conditions lead to an easing of pressure on household budgets, then four times more consumers say they would boost or replenish their savings, rather than spend more on non-essentials.  If true, it raises significant questions about whether taming inflation leads to a consumer spending boom, or just a rebuilding of savings balances that some consumers have used to offset, or totally pay for, the higher cost of essentials over recent years.”

People are still managing to ‘treat’ themselves

The research shows that  even with  people cutting their non-essential spend, they’re still managing to treat themselves:

  • A third of people treated themselves to chocolate, sweets or desserts at home
  • A quarter of people treated themselves to coffeeshop coffee
  • Even if it’ a non-essential spending cut – having a takeaway at home was the third most common way people treated themselves        

Big spends

In the first quarter, taking or booking a holiday was the most common ‘big ticket’ spend- for a quarter of people. 35% also said that they would be spending money on a holiday later in the year.

Meanwhile, one in ten said they have spent on home improvements so far this year, with a quarter saying they’ll be doing so by the end of the year. 

But spending on other big ticket items so far in 2024 was limited, as was the intention to spend on them for the rest of the year.

A quarter of people said that they don’t plan to spend any of their savings this year, with another quarter saying they’re currently using their savings to help meet their essential costs.

Struggling with essential costs?

We can check you’re claiming all the benefits you’re entitled to and offer support with budgeting. We also provide free expert advice if you’re no longer able to keep up with repayments on loans, credit cards, overdrafts etc. There are a number of ways you can get in touch.

You can also check whether you’re entitled to any grants. Enter your details in the Turn2us grant checker and see if there are any you can apply for.

Your local council may have a welfare assistance scheme to help if you need emergency cash or supplies. The support available varies from council to council, but you may be able to get a small loan, a grant, food vouchers or free second-hand furniture, depending on your situation.

England: Get in touch with your local council.

Scotland: Find out if you can apply for a crisis grant or a community care grant through the Scottish welfare fund.

Wales: You might be able to apply for help through the discretionary assistance fund.

Northern Ireland: You may be able to apply for help through the Finance Support Service.

 Household support fund has been extended

 All local councils in England have been given money as part of a government scheme called the household support fund. This money has been set aside to help people struggling with the rising cost of living. Each council decides how best to spend that money, but it’s there to help with essentials such as:

  • gas and electricity
  • broadband and phone bills
  • clothing
  • essential transport costs such as repairing a car or paying for fuel
  • furniture e.g. children’s beds

Get in touch with your local council to find out what support is available in your area. This scheme was due to end in March, but has been extended for another six months.

Avatar of Lydia Bell-Jones

Lydia Bell-Jones

With a background in banking, Lydia has been writing professionally for over five years. She is passionate about helping people improve their personal finances and has a particular interest in the connection between money and mental health.

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