Saving in the cost of living crisis

We take a deep dive into the rising cost of living to find out how it’s impacting the way people spend and save their money.

Our latest piece of research delves into people’s spending habits during the cost of living crisis, helping us understand the best way to support our customers during the current economic climate. This research follows on from our 2022 cost of living survey, so we ask, what’s changed? And are we feeling different to how we felt 12 months ago?

The survey involved 2,000 people, aged 21-55+ with incomes ranging from £18k to more than £100k. We asked a series of questions relating to their spending habits, feelings toward the rising cost of living and how they’re using their savings.

We found people aren’t very confident when it comes to managing their finances, they’re struggling to save and they’re looking to cut back on spending in most areas.

What is the cost of living crisis?

The cost of living in the UK is on the rise, meaning everyday essentials like groceries, energy and fuel have gone up in price quicker than the average household income is increasing. The UK saw a sharp increase in inflation in 2021 and 2022 post pandemic, reaching a peak of 11.1% in October 2022*. We found more than half of people are saving with the cost of living in mind, while 83% are worried about the cost of living.

Your spending habits

Unsurprisingly, the cost of living crisis has had a major impact on both spending and saving habits. A massive 75% of people said they thought they’d be putting away less this year than last year and more than half have had to dip into savings for everyday expenses. Dining out, luxury goods and grocery shopping have seen the biggest cuts on spending overall.

December has always been a big month for retailers, drawing in shoppers to boost sales. However, our research showed cost-conscious consumers were curbing spend over the Christmas period. A third were worried about going into debt over Christmas, and only 17% were willing to take out a loan or become overdrawn to get through it.

People are consistently saving for an emergency fund, with 54% of participants creating an emergency cost of living savings pot compared to 58% a year ago. On the whole, 58% of people were concerned about rising interest rates and subsequent loan repayments, while 58% plan to move their savings to get the best return. Take a look at our latest savings account rates here.


Have reduced the money they spend on dining out


Have spent less on luxury goods and 55% are spending less on groceries


Have reduced their spending on socialising


Have cut spending on holidays

Who is impacted by the cost of living crisis?

No one is immune to the rising cost of living, but we found age, gender and income is playing a part in how people are saving and how worried they are about their finances.

Overall, 61% were concerned about the performance of the UKs economy. Those under 50 years were significantly more concerned than those over 50, and women were 11% more likely to be worried than men. When it comes to Christmas, 26% of men and 35% of women worried about falling into debt. Those under 50 years were most concerned, and even higher earners  on salaries  £60-80k per year were concerned about falling into debt.


Are concerned about managing their finances


Are more confident than women when it comes to their finances

Under 20s

Are most likely to cut back on their grocery shopping

61-70 year olds

Are most concerned about energy prices

Where is the cost of living crisis?

The cost of living crisis spans the UK, but we found people living in different places are affected in different ways.

Almost 1/3 of those living in London are worried about house prices, with 22.5% of Londoners saving more for house deposits. Energy suppliers set different prices for each region, and we found those living in North West England are more concerned about energy prices. That led to a huge 80% of those people being more likely to reduce their energy usage for financial reasons.


Of Londoners are more likely to save for holidays than other regions


Of Scots are more likley to save for emergencies


Of those living in Wales are more concerned about the cost of every day items


Of those living in Northern Ireland are worried about fuel prices

Cost of living help

We're here to support our customers through the cost of living crisis. From top saving tips on social media, to an information hub for those who might be struggling financially, find the information you need using the links below.

Visit our support hub

If you’re struggling financially and want some support, we have a host of information and resources available on our hub.

Find out more

Read our blogs and top tips

Head over to our Facebook page @HodgeBank for a weekly dose of savings tips, or read our blogs on budgeting, savings and more.

Read more

Find further help

Visit our directory of resources and useful numbers below to find the support you need.

Find out more

Cost of living FAQs

Inflation causes the price of things to rise over time. If the inflation rate goes up, so does the cost of every day items. Things like the rising cost of energy, the aftermath of the Covid pandemic, the war in Ukraine and the availability of every day goods are all influencing inflation at the moment.

The cost of living in the UK is rising faster than people’s wages are, add in a strong demand for everyday goods and problems with supply chains, and it causes a cost of living crisis.

There are lots of steps you can take to get through these tough financial times.

Consider reviewing your own finances and start to budgeting for the rising cost of living, you can also work toward saving on your energy bills or start saving for an emergency pot – visit our cost of living blogs page for our top tips on surviving the cost of living crisis.

If you’re a Hodge customer and you’re struggling financially, we’re here to help. Find out more here.

Visit your local Government website to find out if you’re entitled to any financial support.

Our dealing with difficult times hub has information and resources for those who need help with the cost of living, and you can visit our blog for the latest tips on budgeting, saving and more.

If you’re a Hodge customer and you’re struggling financially, we’re here to help. Find out more here.

Visit your local Government website to find out about available financial support and any possible cost of living payments:

Beware of scams from fraudsters pretending to be from a Government agency or support scheme – visit our scams and fraud hub for more information on staying safe in the cost of living crisis.

Cost of living blogs

Find tips and resources for surviving the cost of living crisis in our latest articles.

This article is correct at time of publishing and for general information purposes only. Research conducted November 2022 by Hodge.
*Rising cost of living in the UK