Essential spending has risen 10% year-on-year compared with 6% for non-essentials.
A breakdown of peoples’ spending by the Nationwide in its monthly Spending Report, showed essential spending in October reached £3.76 billion but only £2.94 billion for non-essentials.
When it comes to the essentials, in the year to October 2022, spending on utilities and bills was up 17% despite government support. Supermarket spending was also up, with a 6% year-on-year increase and a 7% rise on the previous month as a result of the increased costs of food and drink.
The amount people are paying for living in a home also went up with rent payments rising by 15% year-on-year and 13% for mortgages.
Fuel transactions were up 10% annually, while the spending increase of 23% compared to October last year reflects the current high prices at the pump. The average transaction value of nearly £30 is 11% higher than 12 months previous.
The amount spent paying off existing debt, such as credit cards and personal loans, was up 15% on last year, suggesting the rising cost of living has forced increasing numbers to turn to credit to make purchases, therefore increasing the amount that is needed to be paid back.
Total spending on non-essential items was around £2.94 billion in October, representing a 6% increase on October last year. It is likely the increases in essential spending have forced people to try and cut back elsewhere.
While spending on subscriptions, such as Netflix, Amazon Prime, wine and magazines, increased by 6% month-on-month, it remained lower than was seen last year – down 4% on October 2021 – as people look to either cancel their subscriptions or look for cheaper plans.
Spending was up on airline travel in October (+4% vs September), clothing and shoes, digital goods such as console games and e-books and eating and drinking. There was also a 20% uplift in spending on gardening and a small uptick on spending on DIY although this was down 5% on October last year.
Sheldon Bosley Knight’s business development manager Nik Kyriacou said: “It’s no surprise people are paying more for goods and services given double digit inflation coupled with the cost of living crisis.
“What is surprising perhaps is the non-essential spend is also up on a year ago although not by as much as for essentials.
“With interest and inflation rates rising, rents and mortgage costs are likely to see increases for the next few months. However, we are hopeful these will not rise too much further given the assurances from the Autumn Statement which suggests inflation should fall next year.”