Low income, younger and black people most affected by cost-of-living crisis

The report, The Price We Pay – the social impact of the cost-of-living crisis, is part of NatCen’s annual Society Watch. It is based on findings from a January 2023 survey of a representative sample of 2,145 adults ( 18+) recruited from the NatCen panel about the impacts of the cost-of-living crisis. 

NatCen panel participants were most likely to report cutting back expenditure by eating less fresh food, eating out less and reducing social visits, making fewer journeys, spending less on gifts, and reducing the number or cost of holidays.

According to the research, 47% of participants reported eating less healthy food, with the proportion increasing for younger adults and those ‘finding it very difficult’ to make ends meet.

Almost two-thirds had cut back on saving, with people aged 30-49 and black people particularly likely to be doing so.

The report also found that men were generally more likely than women to say they had reduced their spending across all measures, with the largest difference in spending regarding holidays and socialising. 

Cost cutting measures were also more common in younger participants, with people aged 18-24 more likely than older participants to reduce their dining out, socialising and holidays. Such measures were also more prevalent among those from minority ethnic backgrounds and those who reported finding their current financial situation ‘very difficult’.

The report highlights the unequal impacts of the current cost-of-living crisis. For example, those whose financial resilience was worn down during the Covid-19 pandemic are now most exposed to rising prices. 

While some people saved money during the height of Covid-19, low financial resilience increased from 23 to 24% of adults during the course of the pandemic, according to the report.

Richard Brown, director of Society Views and co-author of the Society Watch 2023 report, said: “So far, most people’s cost-cutting measures have focused on non-essentials, but people are saving less and borrowing more, and the crisis is leading to a substantial  minority of people going hungry or without heating. Government support has cushioned the blow to date, but continuing action may be needed to minimise damage to people’s lives and society’s long-term prosperity.

“Young adults, more of whom are renters and fewer of whom have savings, are also most likely to be cutting back on healthy food,  putting money aside for savings, heating their homes and eating out. However, when you take into account income and other factors, older people are as likely to be cutting back in some areas too.”

Mark Franks, director (welfare) and economist at the Nuffield Foundation, said: “The cost-of-living crisis has had significant and multiple impacts on various aspects of people’s lives, including nutrition, heating use,  savings, and leisure activities. This report supports findings from other Nuffield Foundation-funded projects, indicating that the most vulnerable households are bearing the brunt of these challenges. This underscores the self-reinforcing nature of inequality and emphasises the urgent need for comprehensive efforts to curb the widening disparities that are prevalent in UK society in 2023.”

The report is based on findings from a January 2023 survey of a representative sample of 2,145 adults ( 18+) recruited from the probability-based NatCen panel about the impacts of the cost-of-living crisis. NatCen conducted descriptive analysis of the panel findings, comparing the experiences of different groups, and data from different years, where possible, to understand how things have changed.

NatCen also conducted regression analysis to measure the impact of different factors, including age, on outcomes, after controlling for other factors such as household income, ethnicity, and parental status. Alongside the NatCen panel data, the researchers used official statistics, and economic, survey and consumer data from other sources.