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Due to inflation concerns and other economic factors, 55% of people say they are spending more on household groceries than they were a year ago, while 48% say the same about gas and electricity, and 43% say they are spending more on fuel. This is according to an Ipsos MORI survey of 2,000 UK bank account holders.
While the cost of goods tends to go up over time anyway, there's been a sharp increase this year after inflation almost doubled, with the Consumer Price Index up from 1.6% in December 2016 to 3.0% this December. Sentiment has followed suit, with 49% feeling positive about inflation in December 2016, but now a whopping 70% having a negative outlook, the latest Lloyds Bank Spending Power Report shows.
Feeling particularly worried are renters, with 75% feeling pessimistic. Families with kids are also feeling the pressure, with 45% expecting to spend more in six months' time, compared to the 37% across all respondents who are planning to spend more.
Year-on-year, consumers' essential spending grew around 2.5% in December, while food, which accounts for about 40% of all essential spending, saw a rise of just under 2%. Meanwhile, fuel spending rose by just under 5%, and gas and electricity spending rose to over 3%.
Increased spending on household items is making it harder for people to save. And yet, many people are looking to reduce their outgoings and better manage their finances at this time of year. Indeed, 30% intend to improve their finances in 2018, with 79% of that group planning to do so by cutting back on their spending.
"This is typically the time of the year when many of us plan to make a fresh start and improve our health and well-being," Robin Bulloch, managing director of Lloyds Bank, said. "It's the perfect opportunity to review your budget and to consider how you can make your money go further."
So, while you may be spending more on groceries and fuel, now could be a great time to see where you could save money. Compare gas and electricity providers to see if you can find a better deal, consider a 0% balance transfer card to pay off debt without having to pay interest for a while, and make sure that the money you are able to save is placed in a top savings account.
You could even switch supermarkets, or switch from branded to own-brand products, to at least keep your grocery costs from going up. There's nothing we can do about inflation, but we can be savvy about how we spend our own hard-earned cash.
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