More than 50% of consumers to make spending cuts

The new figures from TransUnion’s latest Consumer Pulse study also suggest that - while all spend categories will be impacted - consumers said they would significantly reduce their discretionary spendings, such as dining out, travel and entertainment. Retail spending, such as on the purchase of clothing and electronics, will also see a drop in the next three months. 

This could have far-reaching implications for the retail sector and for consumers’ quality of life. Where spending cuts won’t suffice, some also plan to dip into savings to pay at least one of their current bills and loans in full. 

According to Kelli Fielding, managing director of consumer interactive for TransUnion in the UK, the study has highlighted the concerted effort being made by UK consumers to cut back on spending. 

He added: “With continuing financial pressure amid the rising cost of living, it’s more important than ever that people remain diligent about their credit and put into practice healthy habits such as making payments on time, checking their credit information and keeping an eye on their credit score. This will help them stay in control of their financial wellbeing and help to ensure they can access finance if needed.”

Its study also found that 60% of UK consumers see inflation as the biggest concern affecting their household finances for the remainder of 2022 - making it the biggest worry by far, followed by recession at 10%. 

Despite this, the population remains financially stable with 53% saying their household finances are fairing as planned or better, and 73% say they would be able to pay all their upcoming bills and credit commitments in full. 

In addition to this, 80% of UK consumers have seen income either stay the same or increased over the past 12 months, and 29% expect to see it go up in the next year. 

Gen Z consumers appear to be particularly resilient to the current financial pressure, with 63% of young respondents saying they plan to take no action to cut back on discretionary spending. In addition to this, 27% are planning on increasing their retail spending in the next three months.