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Increasing numbers of people are avoiding eating out and more than half have cut back on non-essential spending this year as the cost of living takes its toll, a survey shows.
Fifty-five per cent of consumers have cut down on goods and services that they can live without and 63 per cent of those said they were doing this mainly by making fewer trips to restaurants, research by KPMG, the professional services firm, shows.
Half of the 3,000 consumers it surveyed between March 6 and 10 said they would reduce discretionary spending if their energy bills rose after government cost of living payments were scaled back from April.
Millions will be paying £67 more a month for energy after the government paid the last of six instalments of £400 to help with fuel bills. Only households that meet means-testing requirements will continue to receive support.
A third of consumers polled said they would dip into their savings to cover the cost of energy bills if they were no longer eligible for government support.
The energy price guarantee, which subsidises household fuel bills to cap the average yearly spend at £2,500, was expected to wind down from April, with bills set to rise by £500. However, the chancellor extended the guarantee at its present level for another three months in his budget on March 15.
Bills are expected to fall below the level of the guarantee from this summer as the sharp drop in wholesale gas prices over the winter is passed on to households. Some forecasters have said average energy bills could fall below £2,000 by the end of the year.
Inflation was close to a 40-year high at 10.4 per cent in February, owing to the high prices of energy and food, but it is expected to fall quickly this year.
Linda Ellett of KPMG, said: “With energy, mobile and broadband costs set to rise for many households from April, a number of consumers will likely have to further cut back their discretionary spending. A third of consumers with savings are using them to help to meet their essential costs, while 40 per cent didn’t make any major purchases using savings so far in 2023.”