Our latest research shows that at the start of 2013, more people unexpectedly cut back on their spending and dipped into savings. But why are people finding it harder than usual to predict their future finances?
In January, one in five people said they expected to cut back their spending on essentials. When we asked whether they actually did cut back, this proportion jumped to one in three.
On a similar theme, just one in ten said they expected to dip into their savings in January, while a quarter said they actually ended up doing so.
Our Consumer Insight Tracker poll has shown over the last few months that many are using credit and savings to pay for day-to-day essentials, like food and energy bills. But recently, this has been happening more than people had planned for. So what’s causing this discrepancy?
For me, January is the month when all the car bills arrive – insurance, tax and MOT – which feels a bit of a sting at the start of the year after Christmas. But it’s those unexpected big bills that can really hit our finances – four in 10 people find it difficult to cope when a major unexpected expense rears its head.
Worry about the cost of essentials is at a high
Not only are people’s finances worse than they expect them to be, but our research also shows that people are more worried about the cost of essentials now than they were at the start of the year – more than eight in 10 people are now worried about energy and fuel prices.
I was also surprised that worry about the exchange rate has shot up too – 29% of people were worried about the value of the pound in January, but 45% are now – is that because the UK has lost its AAA rating or is everyone booking up their summer holidays this month?
Have you spent more than you expected to at the start of this year? Have you had any financial surprises?
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