UK households spent 7% more on their energy bills in April compared to March, as the increase in the energy price cap first hit household budgets.
According to the latest Spending Power Report, which includes regular standing order and direct debit payments alongside card payments in its analysis, energy spending increased by almost a third (28%) compared to April last year.
Research commissioned on behalf of Lloyds Bank found that 75% of consumers are extremely or very concerned about home energy prices, which has increased from 61% in December 2021. Similarly, 68% are extremely or very concerned about the rising prices of everyday items, up from 52% at the end of last year.
In further signs of more pressure falling onto homes across the UK, total essential spend between April 2021 and April 2022 rose 6%, with fuel spend soaring 30% in a year as a result of post-lockdown demand and rising prices. For similar reasons, spending on the commute rose by three quarters (71%) with workers making their way back to offices.
Non-essential spend up but signs of holding back
Non-essential spend has also increased over the past year with restrictions lifted, up 17%, however there are signs that budgets are being tightened. Home store spending dropped 10% since April 2021, and spend on electrical items fell 21% after surges in the sectors during the pandemic. Spending on other retail, which includes online marketplaces, dropped 3%.
Despite the tightening of purse strings, it’s clear that the absence of holidays and restrictions on social lives during the pandemic has meant some people are still keen to get out and away. Holiday spend alone is up 288% this month compared to April 2021, and over two thirds (65%) more was spent in restaurants in the same period. Still, 33% now plan to cut down on their leisure spending.
Philip Robinson, PCA & Payments Managing Director, Lloyds Bank, said: “In the space of a month and as a result of the energy price cap increase, energy spend is now almost a third higher than it was this time last year, and 7% more than just a month ago. With the cost of living, in particular essential items, likely to continue to increase, households will need to consider if and where to cut back to manage these higher costs.”