NEWS31 August 2022

Public beginning to feel cost-of-living crisis

Cost of Living News Trends UK

UK – High-income households in the UK are starting to feel the financial pinch amid the cost of living crisis, new research shows.

Woman holding purse and coin

The research, carried out by Havas Media Group, the media arm of advertising group Havas, looked at the current cost-of-living impact on different income groups and their opinions.

Comparing a week’s data in April compared to a week’s data in June, the study shows high-income households ( 40k or more) saw the biggest uplift (up 10 percentage points) in feeling less comfortable financially over the period.

The research, involving 700 respondents, also showed that low and middle-income households continue to feel financial pressure too.

Further findings from the study are that high-income households are increasingly struggling to afford grocery bills (up 12 pp), keep up with rent/mortgages (+9pp) and pay energy bills (+11pp).

These concerns are driving consumers to expect that they’ll cut spending further, especially those in high-income households (+13pp).

They’re also looking for ways to cut costs including saving money on fuel (+ 8pp) and lowering grocery spend (+11pp).

The economy is the biggest concern amongst all respondents ( 36 per cent) while early three-quarters of respondents ( 73%) have noticed big increases in the costs of goods and services.

Between April and June, the biggest increases in costs have been felt in groceries ( 47 per cent v 63 per cent), dining & eating out ( 23 per cent v 34 per cent) and petrol/fuel ( 67 per cent v 82 per cent).

Laura Bebbington, the managing partner of insight, Havas Media Group UK, explains: “The Cost-of-Living crisis has intensified and become more far-reaching, with mid- and high-income households and all age groups feeling the pinch.

“With inflation and its impacts now well-established and a growing nervousness around spending and job losses, people are tightening their belts to the maximum as the dark clouds of recession loom once again.

“We can expect to see imminent energy price hikes and other financial pressures on the household purse increase the impact of the cost-of-living on consumers over the coming months.”

Tony Mattson, head of strategy, Havas Media Group UK, said: “Our research shows the impact of the economic downturn has become a problem for society at large and sadly it shows no sign of abating. On the contrary, the situation is very likely to get worse.

“With markets constrained, now is truly the time for marketing to come to the fore. Contextual understanding will be critical, so that companies and their agencies can adapt to people’s changing needs, motivations, and triggers.

“That means clients and their agency partners being empathetic to the needs of the business, responsive to the dynamics of the category and innovative in shaping customer value. Resilience and adaptability will be critical for success.”