Nationwide Spending Report - Money worries peak as household spending continues to rise

Household money worries have hit their highest level in 2023 as year-on-year spending continues to rise, according to Nationwide Building Society’s monthly Spending Report.

Latest research¹ from Britain’s biggest building society reveals that nearly seven in ten (69%) are concerned³ about their personal finances and ability to cover essential costs. Having started to trend downwards, the last two months have seen people’s pessimism grow - hitting 62 per cent in August and 57 per cent in July.

A third (32%) of those surveyed say they are left with £100 or less in their account at the end of each month, with nearly one in ten (9%) saying they have no money left. The poll of 2,000 respondents shows that the average person now had a debt of £8,000 on their credit card.

The Nationwide Spending Report² – a monthly analysis of more than 241 million debit card, credit card and Direct Debit transactions – reveals c£8.75 billion was spent overall in August. This marked a five per cent increase compared to the previous year, while transactions grew six per cent year on year (see breakdown of categories below and in the tables in Notes to Editor). However, spend in both categories was down one per cent compared to July.

Essential spending overview (full data by category in table below): the amount spent in August reached around £4.34 billion – a three per cent increase on August 2022, but down one per cent on the previous month. The volume of essential transactions, at c122 million, was up seven per cent on August last year. Highlights include:

• Mortgages and Rents: spending on mortgage payments in August was up 11 per cent year on year, while spend on rent payments increased 19 per cent compared to last year.
• Loan and credit card repayments: the amount spent on paying off loans reduced by five per cent year on year, while repayments to credit cards increased by five per cent.
• Discount stores: spend rose by 28 per cent year on year and the number of transactions jumped 43 per cent as people seek to make their money go further by shopping around.
• Travel: the summer period saw many people use public transport to get around, with spend on travel up six per cent increase and a 12 per cent increase in the number of transactions.

Non-essential spending overview (full data by category in table below): at £3.25 billion, overall non-essential spending was up five per cent on last August and, but one per cent down on July. The number of transactions (c110m) was up five per cent against August 2022. Highlights include:

• Digital goods: the summer usually sees many people enjoying the sun, but the dour August weather left many looking for indoor activities, with spend on digital goods, such as console games and e-books up 29 per cent.
• Airline travel: the wet weather in August left many dreaming of sunnier destinations, leading to a 23 per cent year-on-year in increase spend as people booked last-minute breaks and future trips.
• DIY/Home Improvement: with the cost of living still impacting households, many are choosing to put off DIY and home improvement projects, with spend down nine per cent and the number of transactions down 23 per cent over the same period.

Secret Spending:

While many people are continuing to cut back, Nationwide’s research reveals almost three in 10 (28%) of UK consumers have spent money on something that they’ve kept hidden from their partner or their family, with 18 per cent having done it more than once. 

Men are slightly more likely spend money on something they’ve kept a secret (31%) compared to women (25%), whereas when it comes to different ages, 42 per cent of those aged 18-34 admit they’ve done it, compared to just 13 per cent of those aged 55 and over. 

The most popular secret purchases for those that have made them are:

• Clothing (71%), with 41 per cent of those saying they spent up to £500
• Food and drink (63%), with 35 per cent spending up to £500
• Saving money in a separate account (56%), with 25 per cent saving up to £500
• Shoes (55%), with 25 per cent spending up to £500
• Nights out (53%), with 27 per cent spending up to £500
• Hair and make-up (52%), with 26 per cent spending up to £500

For those spending money secretly, more than a third (37%) said it made them feel guilty, while 25 per cent were happy about doing it and 21 per cent admitting they were excited doing so. 

Mark Nalder, Payments Strategy & Performance Director at Nationwide Building Society, said: “Money worries have peaked this year, which is perhaps not a surprise after many people juggled the expectation to spend during the summer with continued high living costs. As we enter the autumn, households will hope for some respite before the return of colder weather and the need to heat homes once again. While energy costs have dipped from their peak last year, the return of high utility bills will not be a welcome sight for many. Just as we saw last year, we expect many to cut back into their discretionary spending in order to manage their budgets.”

- Ends -