Spring has brought a wave of optimism as households across the UK loosen their purse strings, spurred by a decline in essential costs, according to Nationwide’s Spending Report. The report highlights a notable increase in discretionary spending on leisure activities such as gardening, dining out, and holidays, coinciding with a reduction in expenses related to debt, utilities, and childcare.
Despite an overall flat spending figure of approximately £7.5 billion in March compared to the previous year, the volume of transactions surged by five percent, indicating a shift in consumer behaviour. Essential spending, totalling around £4.2 billion, saw a four percent decrease year-on-year, driven by declines in debt repayments, discount store purchases, childcare expenses, utilities, and telecommunications costs. However, housing-related spending continued to climb, with renters experiencing a 24 percent increase compared to March 2023, while mortgage repayments rose by 11 percent.
Non-essential spending witnessed a four percent increase, reaching £3.3 billion, with transactions up by six percent. The onset of Spring prompted Britons to embrace outdoor activities, reflected in a 16 percent year-on-year rise in gardening expenditures, totaling nearly £27.5 million. Additionally, the warmer weather and early Easter festivities boosted spending on dining and socializing, with a 12 percent increase in eating and drinking out.
Mark Nalder, Nationwide’s Payments Strategy Director, noted the impact of weather conditions and easing cost-of-living pressures on consumer behaviour. As Britons emerge from a particularly wet winter, the opportunity to reconnect with outdoor activities has spurred discretionary spending. While some individuals have more disposable income for luxuries, Nationwide acknowledges the ongoing financial challenges faced by others, offering tailored support to those in need.
The Spending Report underscores the complex interplay between economic factors and consumer sentiment, highlighting the resilience of household spending amid shifting financial landscapes. As Spring unfolds and economic conditions evolve, the balance between essential and discretionary spending will continue to shape consumer behaviour, reflecting broader trends in the UK economy.
