Cost of Living Tracker

Rising in cost of living crisis hits discretionary income

Research shows more than a quarter of consumers say that they currently “just about manage” and nearly a third say that they are “a little concerned” about their current financial situation.

Inflation at all-time highs outpacing pay growth is putting household finances under increasing pressure, according to the latest data from Retail Economics-HyperJar.

The Retail Economics-HyperJar Cost of Living Tracker shows that the rising cost-of-living crisis has seen levels of discretionary income – how much households have left after paying for all essentials – among the least affluent UK households face severe decline, plummeting by 12.3% in April. This is the equivalent of £59 per month less cash available to spend on non-essential items.

The average household saw their spare cash fall by 8.1% year-on-year, leaving them with £83 less to spend on discretionary items in April. Across the economy, this is likely to have wiped out around £2.3bn worth of income for non-essentials throughout the month.

The research shows that more than a quarter of consumers already say that they currently “just about manage” and nearly a third say that they are “a little concerned” about their current financial situation. This is even before the costof-living crisis gains full momentum.

Richard Lim, Chief Executive of Retail Economics, said: “The country is witnessing an enormous income shock with the least affluent families anchored at the epicentre. With inflation nearing double digits, life has turned extremely uncomfortable for many households.

“The most disadvantaged families are facing genuine trade-offs between what essentials to buy. There’s only so much cutting back and shopping around that can be done.”

Mat Megens, HyperJar boss, added: “Many of us have never lived through a period of high inflation and it shows. Individuals can’t control this surround-sound of uncertainty, but we can control what we spend and where .”