Counting the pennies

According to recent statistics from the ONS, 89% of UK households are cutting back on spending as inflation hits a 40 year high, a figure that’s equivalent to roughly 46 million people.

This has been driven by an increase in the price of food, gas and electricity bills and fuel. It’s worth noting that the survey was taken in spring and summer, when heating bills are much less of an issue and ahead of Bank of England forecasts for recession, even higher inflation of 13% later this year and interest rate rises that have increased the cost of mortgage repayments.

Up until now, industry forecasts have pointed to greater resilience to the increase in the cost of living at the premium end of the market, and while this still rings true, ONS data suggests that even wealthier households are preparing to batten down the hatches.

27% of adults earning £40-£50k are said to be cutting costs and 22% – more than a fifth – of those with incomes of over £50,000 are also keeping a closer eye on spending.

House prices remain high, and that helps to instil confidence in homeowners, many of whom will be looking at ways to improve the energy efficiency of their properties.

There will always be those who have the means to invest in their property and there’s never been a better incentive to upgrade old windows and doors than the current price of electricity and gas.

However, the data shows that the severity of the cost of living is clearly starting to kick in, even for those with cash to spare and that installers and fabs and going to have to compete harder if they are to successfully tap into a diminishing resource of relatively well off consumers.