Press release

Cost-of-living crisis: spending less, saving less and borrowing more – report

New findings are published as part of the National Centre for Social Research (NatCen)’s annual Society Watch.
  • Publishing date:
    6 July 2023

The 2023 report brings together both existing and previous research and statistics to explore the impacts of the cost-of-living crisis, how people are being affected by and responding to it and what it might mean for the future. 

This research identifies low-income households, younger people and Black people are the most likely to be impacted by rising prices.

The report, The Price We Pay – the social impact of the cost-of-living crisis, highlights that the cost-of-living crisis is not affecting everyone equally, those who ran down their financial resilience during the pandemic are now the most exposed to rising prices as people face the second nationwide crisis in three years.

The report, launched at an event supported by the Nuffield Foundation, examines how the cost-of-living crisis has affected people’s behaviour, consumption patterns and wellbeing. Key insights from the report include:

  • Poverty rates were higher for households with children, without anyone in work, in rented accommodation, and which include a disabled person, and were particularly high for Bangladeshi, Pakistani and Black minority ethnic groups.
  • While some people saved money during the pandemic, low financial resilience increased from 23 to 24 per cent of adults during the course of the pandemic.
  • People are buying less healthy food, eating out less, and cutting back on their social lives, according to NatCen Panel data, with men more likely to be cutting back than women in many cases.
  • People ‘finding it very difficult’ to make ends meet are nearly 35 times more likely to have household bills arrears than those ‘living comfortably’.
  • Almost two thirds of NatCen Panel participants have cut back on savings, with young middle-aged people (30- to 49-year olds) and Black people particularly likely to be doing so.
  • 90 per cent of NatCen Panel participants have taken measures to reduce heating use by January 2023.

Richard Brown, Director of Society Views and co-author of the Society Watch 2023 report said: “The cost-of-living crisis is not affecting everyone equally, and those who ran down their financial resilience during the COVID-19 pandemic are now most exposed to rising prices. So far, most people’s cost-cutting measures have focused on non-essentials, but people are saving less and borrowing more, and the crisis is leading to a substantial minority of people going hungry or without heating. Government support has cushioned the blow to date, but continuing action may be needed to minimise damage to people’s lives and society’s long-term prosperity.

“Young adults, more of whom are renters and fewer of whom have savings, are also most likely to be cutting back on healthy food, putting money aside for savings, heating their homes and eating out. However, when you take into account income and other factors, older people are as likely to be cutting back in some areas too.”

“We know that poverty and food insecurity can have long term impacts for individual citizens and society, so more interventions may be needed to mitigate the impact of the crisis.”

Mark Franks, Director (Welfare) and Economist, at the Nuffield Foundation, said: “The cost-of-living crisis has had significant and multiple impacts on various aspects of people's lives, including nutrition, heating use, savings, and leisure activities. This report supports findings from other Nuffield Foundation-funded projects, indicating that the most vulnerable households are bearing the brunt of these challenges. This underscores the self-reinforcing nature of inequality and emphasises the urgent need for comprehensive efforts to curb the widening disparities that are prevalent in UK society in 2023”.