Britons slashed spending on subscriptions to services such as Netflix and Disney+ in April as cash-strapped households made cutbacks where they could, card transactions show.
The figures from Nationwide building society also reveal that charities continued to feel the impact of the cost-of-living squeeze, which accelerated last month amid soaring inflation, a jump in the energy price cap and a rise in national insurance contributions.
Overall, households in the UK made fewer transactions in April than they did in March, but the amount they spent did not drop, providing clear evidence of the impact of rising prices, Nationwide said.
Composite on inflation
Its latest figures are based on debit and credit card and direct debit transactions made by its members between 1 and 30 April.
Last week it was announced that UK inflation had reached a 40-year high of 9%, pushed up by a sharp rise in energy bills and the escalating cost of food and transport.
At the same time, the cost-of-living crisis has forced many households to slim down their subscriptions to only a few favourites. Netflix – which this month increased the cost of many UK customers’ packages – is in the process of cutting budgets and staff after reporting its first fall in subscribers in a decade.
Nationwide said non-essential spending by its members reached almost £2.8bn in April – broadly in line with March – and that there was a 10% month-on-month fall in spending on subscriptions in April. In addition to streaming services, this category includes newspapers, magazines and wine clubs.
Almost £3.5bn was spent by Nationwide members on essential items in April – on a par with March. Spending on utilities and bills in April rose by a “staggering” 40% month on month as increases in energy, water and council tax took effect, a spokesperson said.
Meanwhile, charity donations fell 16% compared with March’s figure. However, spending was still up 17% on a year earlier “as people look to continue supporting others in less fortunate situations”, said the building society, which has 16 million members.
Spending on childcare fell by almost a quarter in April compared with March as some parents explored cheaper options. However, many parents would have taken time off over Easter, thereby reducing reliance on childcare.
Mark Nalder, Nationwide’s head of payments, said: “Household finances are really feeling the pinch … As we head into the summer months, it will be interesting to see how people balance the need to save money with wanting to enjoy their life with family and friends.” The Guardian