A third of consumers are buying less so far this year as rising food, fuel and energy costs, as well as soaring taxes and inflation, continue to dent their pockets.
According to a survey released by KPMG, Brits spend an average of £82.80 ($108) more each month on bills and taxes, with a growing number using savings to offset their cost of living.
Clothing was the most common cost cutting target (67%) followed by spending less on eating out (65%).
Other savings were being made on less takeaways (56%), food and drink shopping (51%) and experiences, such as cinema (47%).
Consumers are also cutting spending by delaying holidays, reducing the number of beauty products and services, cutting down on transport or vehicle use, and stopping subscriptions such as TV, gyms, and sports clubs.
However, two thirds of consumers with savings still plan to spend on things they want in 2022, with holidays being the most popular big-ticket purchase. Others are looking to spend on home improvement, on a car, home appliances, or a home.
KPMG asked a total of 3,000 consumers between 8 April and 14 April about their 2022 purchasing and their spending intentions for the rest of the year.
Some 31% said they have been buying less of the things they want this year due to having less money as costs rise, while 43% said they have been buying about the same amount as last year.
Just 17% said they have been buying more of the things they want.
“So far in 2022, the cost-of-living squeeze has caused a third of the consumers we surveyed to cut back spending on the things they want, and offset their bills by dipping into their savings, where possible, Linda Ellett, UK head of consumer markets, retail and leisure at KPMG, said.
“The majority of consumers haven’t yet had to take action, as the cost of living rises are yet to fully bite.”
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She added: “Spending intention amongst this group remains relatively strong, despite the wider landscape. A key question for the UK economy for the remainder of 2022 is as costs continue to rise, how many of this group will remain able and willing to spend?”
KPMG economists forecast a slowdown in annual consumption growth, from 6.2% in 2021, to 4.3% in 2022 and 0.5% in 2023. Lower-income households are particularly vulnerable to this year’s rise in utility costs.
Households at the bottom end of the income distribution potentially stand to lose more than 8% of their total disposable income during this year from the combined April and October 2022 energy price cap increases.
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