Cash-strapped Brits have £250 less to spend a month due to cost of living crisis, study shows
BRITS have an average of £250 less disposable income each month, compared to last year – as the cost-of-living crisis continues to squeeze household finances.
The study of 2,000 adults found those who pay rent or mortgages are laying out just over £60 more each month now compared to 12 months ago, while gas and electricity bills have risen by around £100 a month to £248.
And travel expenses have set commuters back in excess of £104 per month more, going from £116 in 2021 to £221 this year.
Personal savings pots have also taken a hit, down 21 per cent in the last 12 months, with three in 10 now living pay check to pay check.
However, despite having less cash to spend after bills each month, Brits are still doing all they can to plan for the future – with six in 10 managing to continue to save regularly.
In fact, adults are still putting away the same now as in 2021 – with nearly 20 per cent of their monthly pay-packets being stowed away on average, despite many having to dip into their savings this year.
It also emerged 35 per cent have achieved all the financial goals they set for themselves in 2022, while a further 19 per cent are happy with the progress they made.
Respondents were able to make progress by cutting back on non-essential spending across the board (38 per cent), going out less (27 per cent), budgeting more (27 per cent) and sticking to a strict budget (22 per cent).
Others found ways to earn more money by selling unwanted possessions (21 per cent), starting a side hustle (18 per cent), working overtime (18 per cent), securing a promotion or pay rise (12 per cent) and even changed jobs (11 per cent).
Brian Byrnes, head of personal finance at Moneybox, said: “It’s clear from this research that where possible, people are doing all they can to protect their savings and achieve their financial goals despite personal finances being stretched so much in such a short space of time.
“But of course, not everyone has the flexibility in their budget to plan for the future right now.
“If that’s the case for you, remember the most important thing you can do for your financial wellbeing in 2023 is build positive financial habits that will set you up for success in the long term.”
The financial crisis appears to have prompted many to take a fresh look at how they manage their finances, with 27 per cent setting a budget for the first time in the last year.
While 41 per cent have started thinking about how to become more financially resilient in the future, and 26 per cent are planning ahead more now than ever before.
More than a third (34 per cent) even feel they have more control of their finances, and 29 per cent feel they are better at managing their money now than before the financial crisis.
Looking ahead to 2023, as with 2022, building up a rainy-day fund is the top financial goal for the next 12 months, with 34 per cent wanting this safety net in case of further price increases in 2023.
And 30 per cent want to ensure they have enough cash to fall back on in case they run into any job issues caused by the impending recession.
Nearly a fifth (19 per cent) are saving toward a house deposit, and 11 per cent are setting themselves the goal of maxing out their annual Lifetime ISA government bonus in 2023.
And 25 per cent intend to prioritise saving and investing more in 2023.
The study, carried out via OnePoll, found 29 per cent are optimistic that if all goes well, they will be able to achieve their financial goals as planned this year.
While 23 per cent feel confident about their financial situation and are focused on long-term opportunities to build wealth.
However, 16 per cent feel anxious and nervous about how they will manage their finances in the year to come, while 24 per cent don’t expect their financial situation to change in the coming year.
Brian Byrnes added: “At one time or another, most of us will admit to not spending enough time managing our finances to help us achieve our future goals.
“Committing to taking some simple steps now to build positive financial habits such as budgeting, regularly reviewing your spending, and setting achievable financial goals, will all help you take control of your future finances and manage the impact of rising costs of living with greater confidence.
“It will also set you on the right path to achieve your goals as quickly as possible in the future.”