Cutbacks are continuing to be announced and wages are showing no signs of increasing to keep up with the rising costs of living, so more people are looking for ways to reduce household expenditure and make inroads into tackling their own levels of personal debt.
The latest Lloyds TSB Spending Power Report found there was a -1.4% decline in consumer spending in real terms during January 2013. This translates as the average UK household starting the year with £13 less to spend on non-essential items each month.
The figures prove what many already intrinsically know, that weak or nonexistent income growth paired with increases in the costs of essential day to day living results in a great many Britons finding it increasingly difficult to make ends meet.
Speaking about the findings, Patrick Foley, chief economist at Lloyds TSB, commented on the reports by saying that he felt they demonstrated how a significant number of consumers are still under financial pressure.
“Essential spending growth has clearly been affected by the snow in January, but the picture of weak discretionary spending power remains in place at the start of 2013” he said.
“Looking ahead, inflation is likely to remain high and is expected to pick up in the first half of the year, so what happens to income growth will continue to dictate the extent of the squeeze on households.”
The report also indicates that the financial stresses encountered by many in January were due to some 30% of people who spent more than they had budgeted for over the Christmas period. Some 22% of people claimed that they had spent more money over the holiday period than they had the year before.
Much of the extra spending will have been fuelled by unsecured lending on credit cards and the increasingly prevalent ‘pay day lenders’ which have established an increasing presence on British high streets.
The latter are a particular concern to some financial analysts, who point out that the rates of interest charged can mean that small debts quickly escalated into far less manageable amounts.
So what can the average UK consumer do to try and tackle their own individual financial expenditure problems?
Get the best deal
One of the biggest negative influences on increased household expenditure over the past couple of years has been the drastic increases in the cost of domestic energy supplies.
Both gas and electricity prices have shot up, with some commentators levelling accusations of profiteering against the energy companies.
Although many may feel that competition hasn’t be in the interests of the consumer when it comes to pricing of energy supplies, there is still benefit to be found in comparing different companies.
Swapping energy providers, or simply consolidating gas and electricity with one company, can offer savings and the process is relatively simple and straightforward to do.
Method of payment
For most monthly bills, including energy supplies and also things such as mobile phone and internet contracts, the method of payment you use can mean you are paying extra.
Setting up direct debits usually means you can make savings on payment charges and also helps avoid missing a payment and incurring late payment fees.
Make use of discount websites such as Quidco
According to a new survey 82% of British consumers now make use of several methods to get the best discounts. The report by Opinium research found that regular users of discount websites, cashback offers and vouchers save an average of £452 a year.
Nearly half of British consumers (47%) said that they would consider themselves ‘regular’ users of price comparison websites and 31% log on to specialist discount code websites when they are looking to make a purchase.
This approach is most widely used when it comes to buying domestic electrical items and appliances but 64% of shoppers say they have also made savings on their supermarket grocery purchases in the same way.
Unsecured lending problems
With personal unsecured debt reaching record levels, anyone who is experiencing problems in maintaining repayments should take action sooner rather than later.