Moneyhub data reveals how the cost-of-living crisis is influencing consumer spending

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Moneyhub, a market leading Open Finance, Open Data, and payments platform, has released new data which reveals how Britons’ spending habits are changing during the cost-of-living crisis.

The statistics show that wealthier consumers are now spending more on healthcare, potentially indicating they are choosing private healthcare rather than relying on the NHS. It also shows that people are spending less on their pets and increasingly choosing to shop at lower-priced supermarkets.

Spending on utilities has gone up by almost a fifth, whilst drivers spent one-third more on fuel in 2023 than during the same period in 2022.

The data was gathered by analysing trends of anonymised user data from a sample of users of Moneyhub’s Open Data-powered personal finance technology platform.

As well as highlighting the changing behaviour of consumers in the UK, the statistics demonstrate the power of Moneyhub’s data platform and showcase the depth of the insights it can unlock for businesses that use Moneyhub’s platform.

The data reveals:

  • A 52% increase in spending on healthcare in higher income users earning more than £51,000 per annum – with no significant increase in other income groups.
  • Lower income users earning less than £21,000 per annum £1,750 per month) spent 34% less on pets in Jan 2022 than they did in January 2023, reducing their monthly spend from £104 to £68.
  • Aldi and Lidl have the number of shoppers increased by 19% and 17% between January 2023 and Jan 2022.
  • Morrisons and Waitrose have seen decreases of 10% and 17% respectively.
  • Utility bills are up 18% and car fuel spending is up 39% in January 2023 compared to January 2022.

This year, the FCA’s new Consumer Duty comes into force, requiring financial services firms to avoid ‘foreseeable harm’. A Moneyhub survey found that 87% of senior figures at banks and building societies agreed that the regulations “will have a significant impact” on their businesses.

During the ongoing cost-of-living crisis, lenders will come under increased pressure. The Duty will also place new expectation on firms, which must urgently act to address issues around affordability, vulnerability, and customer outcomes.

Open Banking and Open Finance enable customers to share data with lenders to provide a holistic, accurate, timely, and forward-looking assessment of income, expenditure and affordability. They will also help firms to ensure Consumer Duty compliance.

Dan Scholey, Chief Commercial Officer, Moneyhub, said: “The cost-of-living crisis is biting hard and forcing people to change their spending habits. Many people will be turning to credit to get by – which means lenders must act now to ensure they are supporting vulnerable people and offering the most appropriate products.

“The FCA’s new Consumer Duty will fundamentally change the lending landscape. Firms have been slow to introduce Open Banking and Open Finance-powered decissions and affordability assessments which enable compliance with the Duty and give lenders a holistic, accurate, and real-time assessment of income, expenditure and affordability.

“As the cost-of-living crisis grinds on, lenders should make the adoption of Open Banking and Open Finance tools a priority in order to comply with the Consumer Duty as well as give their business a competitive edge by dynamically responding to the changing circumstances of their customers.”