£145 average rise to monthly essential costs since 2022 began

New KPMG research shows how the rising cost of living has impacted household budgets so far this year.

New KPMG research shows how the rising cost of living has impacted household budgets

New research released today by KPMG shows how the rising cost of living has impacted household budgets so far this year, and the steps consumers are taking to manage rising prices.

In early September, KPMG surveyed 3000 UK consumers of varying household incomes, finding that essential household costs (food, energy, fuel, mortgage or rent) have risen by an average of £145.50 per month compared to when 2022 began.

The survey findings showed that the highest average monthly cost increase was amongst consumers aged 35-44, who reported paying £194.40 more a month than in January.

To manage those rising costs, consumers told KPMG how they are adapting with:

  • A third buying more own brand / value products.
  • A third buying more products on promotion / discount.
  • A quarter switching brands.
  • A quarter shopping at less expensive retailers.
  • A quarter buying fewer items.
  • One in five swapping eating out for premium home cook meals.
  • One in ten spending more on credit.

When asked about their ability to still make non-essential purchases:

  • 24% said they had been buying more of the things they want in 2022.
  • 34% said about the same amount as in 2021.
  • 26% said they had been buying less than in 2021.
  • 16% weren’t sure.

Reacting to the findings, Linda Ellett, UK Head of Consumer Markets, Retail and Leisure, said: “Three thousand consumers told us, on average, that rising essential costs have left them £145 worse off a month compared to the start of the year.  Of course, some households are already paying more than this average, and all households still have October’s energy price rise to manage.”

Those that have been buying less this year have most commonly been cutting back on eating out (59%), clothing (54%), and takeaways (51%) – the three most common areas of spending reduction from polling in April and December 2021.

On average, consumers that had savings at the start of 2022 have 43% remaining.  Half of those polled are not currently using their savings to help meet their essential costs, but a third of consumers are having to.  An additional one in ten have now spent all their savings on offsetting rising essential costs.

Linda added “It’s clear that consumers are responding where they can - altering how much they buy, what they buy and where they buy it.  Retailers are also responding and will need to continue to be data driven to anticipate and adapt to changes in demand.”

Value for money has been the most common consideration when purchasing throughout 2022, followed by quality, and then sustainability. 

Environmental sustainability remains as much of a purchasing consideration as it was in 2021 for the majority of consumers.  But despite the cost of living squeeze, a fifth of consumers are considering sustainability more this year when buying goods.  Only 14% said it was less of a consideration.

Overall, a greater amount of the 3000 consumers said that they were feeling more secure (37%) than less secure (22%) in their financial circumstances than they were at the beginning of the year. 

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When KPMG polled 3000 consumers in April, the result was reversed with 34% feeling less secure vs 26% feeling more secure. 

Linda Ellett added: “the increase in the proportion of consumers feeling more financially secure than they did at the start of the year, despite the rising costs, is surprising.  But it could be the case that the actions they have taken to manage outgoings has improved confidence in being able to prepare for this cost of living squeeze. 

“Increased certainty regarding energy costs will provide some further confidence.  But unsurprisingly, in the face of rising costs, regardless of cutting back and searching out lower prices, some consumers are struggling to meet even essential costs.  They feel less financially secure than when the year began and face a tough winter ahead.”   

Media contact:

Steven Reilly-Hii, Media Relations Manager (Consumer Markets), KPMG UK, steven.reilly-hii@kpmg.co.uk , 07510 376635.

Polling Questions and Results:

3000 consumers interviewed online between September 1 and 8 by OnePoll, for KPMG UK.

Ages of respondents:

  • 18-24: 10%
  • 25-34: 22%
  • 35-44: 17%
  • 45-54: 18%
  • 55-64: 19%
  • 64+: 15%

Gender identified with:

  • Female: 54%
  • Male: 46%

Do you feel more secure in your financial circumstances now than in January (2022), or less?

  • Much more secure: 15%
  • Slightly more secure: 22%
  • No more or less secure: 36%
  • Slightly less secure: 12%
  • Much less secure: 10%
  • Prefer not to say: 5%

So far in 2022 have you done any of the following?

  • Been buying more of the things I want: 24%
  • Buying about the same as 2021: 34%
  • Been buying less of the things I want: 26%
  • Not sure: 16%

If you have been buying less, what are you cutting back on? (Select all that apply)

  • Eating out: 59%
  • Clothing: 54%
  • Takeaways: 51%
  • Food and drink shopping: 44%
  • Experiences (cinema, theatre, for example): 42%
  • Travel/Holiday (lower price, or delaying, for example): 36%
  • Beauty products & services (make up, manicures, for example): 32%
  • Home improvements (products and services): 32%
  • Vehicle / transport usage: 26%
  • Media subscriptions (TV, magazines, newspapers, for example): 25%
  • Technology: 25%
  • Fitness (gym, sports clubs, for example): 16%
  • Meal delivery kits: 14%
  • Children’s clothing & toys: 8%
  • Pet products: 8%
  • Other: 1%
  • None of the above: 1%

If you have been buying less, which of the following options describe why you are buying less? (Select all that apply)

  • I have less spare money as things are costing more: 48%
  • I am trying to reduce the amount I consume: 27%
  • I am saving money for the future: 18%
  • I have had a change in my life circumstances (e.g. changed jobs, moved home, more people in household): 6%
  • Other: 0%

How much more each month, on average, have your total essential household costs (eg. food, energy, fuel, mortgage/rent) risen compared to when 2022 began?

  • £0: 1%
  • £1-50: 13%
  • £51-100: 23%
  • £101-150: 15%
  • £151-200: 9%
  • £201-250: 6%
  • £251-300: 4%
  • £301-350: 2%
  • £351-400: 1%
  • £401-450: 1%
  • £451-500: 2%
  • £501+: 2%
  • Don’t know: 7%
  • Prefer not to say: 6%
  • I am not personally responsible for this in my household: 8%

Due to a higher cost of living are you currently spending savings to help meet your essential costs?

  • Yes: 30%
  • No: 49%
  • N/A – I’ve spent all my savings helping to meet my essential costs: 10%
  • N/A – I never had savings: 10%

What proportion (%) of your overall savings that you started 2022 with remain unspent?

  • 1-10: 8%
  • 11-25: 25%
  • 26-50: 30%
  • 51-75: 12%
  • 76-100: 22%
  • N/A – don’t have savings: 3%

If you still have savings to spend on the things you want in 2022, before the end of the year will you use them to purchase any of the following 'big ticket' items

  • A holiday: 33%
  • Home improvements: 32%
  • A car: 24%
  • Home appliances / home electronics: 24%
  • A home: 24%
  • N/A – don’t have savings/ don't plan to purchase any 'big ticket' items: 26%

So far in 2022, where have you made the majority of your purchases?

  • Online: 25%
  • In-store: 21%
  • Both equally: 46%
  • Not sure: 8%

Which of the following steps have you taken to offset price increases when shopping?  (Select all that apply)

  • Buy more products on promotion or discount: 32%
  • Buy more own brand / value products: 30%
  • Spend more time looking for bargains: 27%
  • Buy different brands to avoid paying higher cost: 26%
  • Shop at less expensive retailers: 25%
  • Buy fewer items: 25%
  • Shop at multiple stores to find bargains: 24%
  • Stock up on items in case prices rise: 23%
  • Swap eating out for premium home cook meals: 19%
  • Buy wholesale/bulk: 18%
  • Spent more on credit: 13%
  • None of the above: 12%

So far in 2022, what are your top considerations when purchasing goods and services? (Select up to three)

  • Value for money: 49%
  • Quality: 41%
  • Sustainability: 27%
  • Convenience: 27%
  • Customer experience: 19%
  • Ethics: 15%
  • Data privacy: 15%
  • Other considerations: 14%
  • Not sure / nothing in particular: 9%

As the cost of living has risen in 2022, has environmental sustainability been more or less of a consideration in your purchasing than in 2021?

  • More: 21%
  • No change: 58%
  • Less: 14%
  • Not sure: 8%

About KPMG:

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.