Middle Britain feels the pinch as the cost-of-living crisis carries up the classes
Britain’s middle classes are seeing their financial cushion evaporate as the cost-of-living crisis spreads to the suburbs, according to a downbeat new study from Havas Media Group.
The cost-of-living crisis is now impacting Brits of all income brackets / Havas
The media division of Havas calculates that previously well-off households earning over £40k per year are now feeling the pinch as disposable income shrinks, with the proportion of high-income households feeling less economically assured than in April rising by 10%.
The second wave of financial pressures is hitting all income classes, but high-income groups are only now beginning to suffer, with the number reportedly struggling to pay grocery bills rising by 12%. A further 9% of the group are experiencing difficulty in keeping up with rent and mortgage payments, while the number eyeing their energy bills in distress has jumped 11%.
Naturally, such figures are already putting a dampener on future spending, with the volume of high-income households expecting to curtail spending to balance the books rising by 13%.
Charting the impacts between the first and second waves of the cost-of-living crisis, Havas found that 73% of respondents have observed big increases in the cost of goods and services, up from 55% the last time around. Overall the biggest increases were observed in groceries (47% v 63%), dining & eating out (23% v 34%) and petrol/fuel (67% v 82%).
Laura Bebbington, managing partner of insight at Havas Media Group UK, said: “The cost-of-living crisis has intensified and become more far-reaching, with mid- and high-income households and all age groups feeling the pinch. With inflation and its impacts now well-established and a growing nervousness around spending and job losses, people are tightening their belts to the maximum as the dark clouds of recession loom once again.”
Worsening personal circumstances have translated to deteriorating sentiment on the economy at large, with 36% of respondents concerned about the future of UK Plc – an 8% rise on the last cost-of-living crisis wave.
The upshot of this mounting concern is a growing willingness among consumers to switch products, with the numbers shifting commercial allegiances rising 5% in the food and drink sector and 10% among computer and video games. Similar shifts can be observed in electrical products (+6%) and homeware and furniture (+8%).
Tony Mattson, head of strategy, Havas Media Group UK, added: “With markets constrained, now is truly the time for marketing to come to the fore. Contextual understanding will be critical so that companies and their agencies can adapt to people’s changing needs, motivations and triggers. That means clients and their agency partners being empathetic to the needs of the business, responsive to the dynamics of the category and innovative in shaping customer value.”
Since the cost-of-living crisis began, Brits have hardened their views on the functional, personal and collective benefits offered by brands, with the proportion expecting improved transparency and honesty in communications up 4%. Those looking out for themselves to save money and pursue fair pricing are also in the ascendancy, up 2% and 1% respectively.
During the first wave of the cost-of-living crisis in April, 59% of Brits were found to be budgeting for the crisis.