Consumer spending and the number of transactions made by households fell in June, according to Nationwide Building Society’s Spending Report1. The latest data is the first real indication of how the cost-of-living crisis is pushing households to cut back on costs while they can.
The latest spending data comes as Nationwide prepares to launch support for those experiencing financial difficulty. This includes a freephone cost-of-living hotline that will be rolled out in August and answered by experts who will also proactively call members who are struggling financially.
Nationwide’s monthly Spending Report shows overall spending fell four per cent month-on-month in June to just over £8 billion, driven by a six per cent drop in non-essential spending and three per cent drop in essential spending compared to May. Overall, there were around 217 million transactions made in June (down from around 226 million in May), with essential spend transactions down three percent and non-essential down by five per cent versus the previous month.
Essential spending snapshot: Spending on fuel and electric vehicle charging was the only category to see a month-on-month rise. June accounted for just over £3.6 billion according to the report – representing a fall of £123 million compared to May. All essential spend categories saw a fall, except for fuel and electric car charging which saw a three per cent month-on-month increase. With more than £312 million spent, fuel and electric car charging spending in June is up by a third (33%) compared to the same month last year.
Non-essential spending snapshot: Nearly every non-essential spending category saw a month-on-month fall in spending during June – from eating out and subscriptions to gardening and gambling. Spending on non-essential items fell back below the £3 billion mark with around £165 million less spent during June and around five million fewer transactions as people balance enjoying the summer and their finances. Overall, more than £2.8 billion was spent on non-essential purchases in June – a six per cent fall on May. At around 96 million, the number of non-essential transactions is also down five per cent on May.
Mark Nalder, Head of Payments at Nationwide Building Society, said: “Following a peak in spending during May, our data suggests households have started to cut back across the board and where they can. This is happening as we enter the summer period where customers will want to enjoy themselves, so it will be interesting to see how these often-conflicting interests are balanced. As we head into the holiday season, we expect budgeting to continue being a feature as the nation prepares for even higher costs with inflation continuing to climb and the energy price cap rising again this autumn.”
Essential spend overview
- Fuel and electric car charging: Given the current cost of fuel, it’s perhaps unsurprising that fuel and electric car charging was the only category in essential spending to see a month-on-month rise in spending in June. Reflective of where prices stand now compared to 12 months ago, spend is up by nearly a third (+33%) whereas the number of transactions made is only up 10 per cent on 2021.
- Utilities and bills: Spend in June saw a small drop (-2%) on May as direct debits start to stabilise following the rise in the energy price cap in April. However, given the significant rise in costs versus the previous year, spend was still 17 per cent higher than in June 2021.
- Debt: The amount spent to pay off existing debt, such as credit cards and personal loans, saw a nine per cent drop in June as people perhaps have either finished paying off the debt, have less spare money available to be able to put towards servicing existing debt, or even because any spare money is being used to pay for other essential or non-essential items.
- Travel: The amount spent on travel in June, such as public transport and taxis, was up 54 per cent on June last year through a mix of more people commuting as well as travelling for holidays and to music and sporting events.
|
ESSENTIAL SPEND (June 2022) |
||||||
|
Spend category |
Total spend in June 2022 (£) |
% Change vs May 2022 |
% Change vs June 2021 |
Total transactions (June 2022) |
% Change vs May 2022 |
% Change vs June 2021 |
|
Childcare |
3,223,249 |
-5% |
45% |
113,741 |
-11% |
33% |
|
Debt |
559,010,556 |
-9% |
2% |
2,867,049 |
-8% |
-3% |
|
Discount stores |
98,059,540 |
-4% |
2% |
4,541,739 |
-3% |
2% |
|
Fuel/electric vehicle charging |
312,472,881 |
3% |
33% |
10,004,604 |
-1% |
7% |
|
Insurance |
225,660,276 |
-2% |
-2% |
4,896,224 |
-2% |
-1% |
|
Mortgage payments |
173,920,127 |
0% |
7% |
288,074 |
-2% |
1% |
|
Motoring |
204,764,624 |
-4% |
-12% |
1,542,974 |
0% |
1% |
|
Pets |
43,868,973 |
-3% |
6% |
952,664 |
-5% |
3% |
|
Rent payments |
18,362,501 |
-4% |
5% |
79,151 |
-5% |
-3% |
|
Supermarkets |
985,308,143 |
-2% |
4% |
55,240,168 |
-2% |
12% |
|
Travel |
116,751,243 |
-5% |
54% |
11,766,563 |
-5% |
30% |
|
TV, phone & broadband |
253,313,990 |
-6% |
0% |
7,174,199 |
-6% |
-2% |
|
Utilities & Bills |
621,649,599 |
-2% |
17% |
7,025,211 |
-3% |
4% |
|
TOTAL |
3,616,365,701 |
-3% |
7% |
106,492,361 |
-3% |
10% |
Non-essential spend overview
- Gardening: After a bloom in May, gardening spend fell away in June with more than £27.5 million spent (-28%), down more than £10 million on the spend in May. The number of transactions also fell by 23 per cent in June.
- Subscriptions: There was a nine per cent drop in spending on subscriptions, such as Netflix, Amazon Prime, food, drink, newspapers and magazines, month-on-month in June, with the number of transactions made also down seven per cent. Spending on subscriptions is also slightly down (-3%) on June last year.
- Gambling: Spending on gambling (e.g. National Lottery tickets and scratch cards) saw a 12 per cent drop in June. It was also down six per cent on the same period last year as people forego the chance to win big money in order to save money and spend it on other things.
- Dating: More than £1.1 million was spent on dating (apps, for example) in June – this was down 10 per cent on June last year as the chance to find love takes a back seat.
- Eating and drinking out: Although spending on eating and drinking out fell slightly (-5%) month-on-month, it was still 18 per cent higher than June last year, with the number of transactions made up by nearly a quarter (+23%) as people enjoy a summer of freedom and good weather to socialise with friends and family.
|
NON-ESSENTIAL SPEND (June 2022) |
||||||
|
Spend category |
Total spend in June 2022 (£) |
% Change vs May 2022 |
% Change vs June 2021 |
Total transactions (June 2022) |
% Change vs May 2022 |
% Change vs June 2021 |
|
Airline travel |
56,643,904 |
-13% |
244% |
373,286 |
6% |
266% |
|
Charities |
46,465,683 |
-5% |
5% |
2,218,257 |
-3% |
10% |
|
Clothing/Shoes |
236,819,496 |
-5% |
11% |
5,406,135 |
-4% |
7% |
|
Cruises |
14,035,066 |
3% |
307% |
53,674 |
12% |
165% |
|
Dating |
1,183,805 |
-2% |
-10% |
47,542 |
-5% |
-27% |
|
Digital Goods |
46,497,153 |
-5% |
21% |
5,430,971 |
-5% |
13% |
|
DIY/home improvements |
263,554,310 |
-8% |
-8% |
3,939,440 |
-7% |
-1% |
|
Eating/Drinking |
498,592,952 |
-5% |
18% |
36,000,681 |
-6% |
23% |
|
Gambling |
188,943,048 |
-12% |
-6% |
7,833,552 |
-10% |
4% |
|
Gardening |
27,681,770 |
-28% |
-17% |
837,455 |
-23% |
-12% |
|
General retail/dept stores |
277,597,659 |
-4% |
-1% |
9,742,141 |
-4% |
-5% |
|
Health/Beauty |
185,830,922 |
-3% |
8% |
5,708,574 |
-1% |
16% |
|
Holidays |
337,630,882 |
-3% |
90% |
2,117,669 |
-1% |
45% |
|
Leisure/recreation |
165,903,185 |
-2% |
17% |
5,565,396 |
-2% |
20% |
|
Other shops |
475,534,629 |
-4% |
1% |
9,202,736 |
-2% |
4% |
|
Subscriptions |
18,533,467 |
-9% |
-3% |
1,541,442 |
-7% |
1% |
|
TOTAL |
2,841,447,931 |
-6% |
13% |
96,018,951 |
-5% |
12% |
Ways to pay:
As people turn to credit cards to pay for goods and services, it’s perhaps unsurprising to see such spending up 16 per cent in June compared to the same period last year. This compares to just an eight per cent increase for debit cards, according to Nationwide’s data.
The shift to more people using their mobile device to tap and go in store that gained momentum during the pandemic appears here to stay, with spending via mobile payments up 87 per cent compared to June 2021.
|
WAYS TO PAY (June 2022) |
||||||
|
Total spend in June 2022 (£) |
% Change vs May 2022 |
% Change vs June 2021 |
Total transactions (June 2022) |
% Change vs May2022 |
% Change vs June 2021 |
|
|
Debit card |
4,918,659,393 |
-5% |
8% |
175,014,473 |
-4% |
13% |
|
Credit card |
755,198,298 |
-2% |
16% |
14,932,389 |
-2% |
9% |
|
Card contactless2 |
1,036,743,005 |
-4% |
30% |
74,307,299 |
-4% |
10% |
|
Mobile payments3 |
486,797,082 |
0% |
87% |
38,919,964 |
-2% |
78% |
|
Direct Debit |
2,343,478,403 |
-5% |
7% |
27,671,722 |
-3% |
-1% |
|
TOTAL |
8,017,336,094 |
-4% |
8% |
217,618,584 |
-4% |
10% |
Nationwide cost-of-living support:
At this time, Nationwide Building Society is supporting members struggling with the rising cost-of-living. From August, a freephone cost-of-living hotline for those experiencing money worries will be answered by dedicated, trained experts based across the Society’s main branches. The service will be available from 9am-4.30pm weekdays and 9am-12pm Saturdays. Nationwide aims to answer calls to the hotline within ten minutes. Outbound calls will also be made.
From September, all frontline colleagues will receive the necessary training to provide additional cost-of-living help for members, whether in branch or on the telephone, and in October Nationwide’s cost-of-living experts will be able to offer face-to-face, telephone and video appointments. Virtual and in-branch events will be held for members from the autumn, providing practical help with managing money and avoiding financial pitfalls.
Anyone in financial hardship should contact their bank or building society for support. See more at Cost of living | Nationwide.
- Ends -
