With recent ONS data showing the average disposable income in the UK increased by £700 per household compared to 2019, Share to Buy analyses how much the average Brit spending habits have changed during the lockdown periods and the top most impulsive splurges of 2020.
According to Barclays, Brits spent a total of £40.6 billion on dispensable items to make their time at home more enjoyable during lockdown. This spending works out to an average of £771.34 per person. Interestingly, around one third (33%) of UK spenders said that their purchases made lockdown more enjoyable.
Over half of Brits (54%) have said that the COVID-19 pandemic has caused “minor, moderate or major” decreases in their spending. Most of those cutting back are in the 25-to-34-year age group (62%). Younger adults in the 18-to-24-year group were most likely to have made “major” cutbacks in spending (16%).
While the nation has been spending less overall, specific categories have seen a surge in purchases:
Share to Buy analysis shows UK’s top 10 impulsive lockdown purchases in 2020 include:
- Summer Clothes
- Outdoor Plants
- Baking Ingredients
- Entertainment Subscriptions
One fifth (20%) of Brits reported spending more on streaming services, being unable to attend concerts, movies or social gatherings in person.
Spending patterns among women and men were similar, although women were more likely to say they had spent more on certain items:
- Groceries (58% women vs 45% men)
- Hobby supplies (29% women vs 19% men)
- Books (26% women vs 17% men)
Meanwhile, it’s interesting to note that British men have been spending nearly double on their appearance compared to women. This includes money spent on fashion, fitness, and health and beauty products.
Overall, women in the UK spent an average of £571.58 per person, while men spent an average of £1,014.08.
How to Save Money: Basic Ways to Boost Your Savings
- Start to budget: 2020 was a financially difficult year for many, but if you want to start budgeting, try keeping a list of debt and savings targets in your wallet to stay on track with a planned budget for the month. This is a good way to see how much you really spend on entertainment, travel and more.
- Stick to a list: One of the simplest money-saving tips is to decide what to prioritise by creating a list before you go shopping. The trick is to stick to it to avoid impulse purchases like chocolate or clothes.
- Prioritise spending: From health and beauty to takeaways and tech, prioritise spending habits from highest to lowest across each major category, and see where you can cut down. Try to spend money across just one of the categories each month.
- Create a waiting list: Help to reduce impulse spending and increase disposable income savings by creating a two-week waiting list for bigger purchases to see if they really are worth the spend.
- Use technology: Finance apps like Money Dashboard and Tandem can help you stay one step ahead of your finances by tracking how much you save and spend.
- Recheck all your subscriptions: Stop wasting your disposable income through unused gym memberships, magazines, TV channels and more. Do an audit of every group or service you belong to and cut everything you no longer engage with by using a helpful app like Emma.
- Set short-term goals: Alter your spending habits by creating specific goals you can work towards, like cutting your entertainment budget from £300 a month to £200. If you’re looking to step onto the property ladder, use this mortgage comparison tool to discover what kind of mortgage you could afford to begin setting your goal. Whether you fall into the average disposable income in the UK or not, any amount of savings is a good start!
Nick Lieb, Head of Operations at Share to Buy, comments:
“In 2020, the average price of a first-time buyer home in inner London was £517,920 – meaning that a 20% deposit would work out at an eye-watering £103,584. For those looking to buy their first home on the open market, spending less on subscriptions, clothes and food could go a long way in helping their savings balance increase.
“In stark contrast, saving to buy a Shared Ownership home can prove to be much more achievable for first-time buyers. For example, if a couple can put aside £400 a month, then they could save for a deposit in a third of the time needed for a deposit on the open market.”
About Share to Buy
Share to Buy is the UK’s leading online portal for Shared Ownership properties. Established in 2004 as the UK’s first specialist online mortgage broker for affordable home ownership products, the site has since developed into a one-stop shop for first-time buyers, offering the UK’s largest listing of Shared Ownership homes for sale.