British households have cut spending on gyms, streaming subscriptions and gaming over the past year as the cost of living crisis continues to reshape consumer habits.
New data from MoneySuperMarket’s Household Money Index, which tracks the income and spending patterns of 8,000 consumers across 31 categories, shows a sharp decline in discretionary spending, suggesting households are choosing long-term financial security over short-term luxury.
The average monthly spend on gym memberships has fallen sharply from £51 in September 2024 to just £13.20 this year, while subscriptions to streaming services such as Netflix and Amazon Prime have fallen from £32.20 to £23.50. Spending on video games was the hardest hit, falling 75 per cent to £10.90 a month from £43.70 a year ago.
The report highlights a significant shift in consumer priorities, with households focusing on deleveraging and saving, despite a slight increase in disposable income.
Kara Gammell, personal finance expert at MoneySuperMarket, said: “As disposable income has increased, many British households are making conscious decisions to prioritize long-term financial health over short-term luxuries. The sharp fall in discretionary spending reflects this new mindset.”
Gammell added that in addition to cutting costs, households are “making their money work harder” and are increasingly channeling their savings into paying off loans, pensions and investments.
However, the results sparked skepticism in the fitness industry. Huw Edwards, chief executive of ukactive, said the figures did not match what gyms were seeing locally. “This research does not reflect the clear trends we are seeing in demand for gym memberships,” he said. “A record 11.5 million people are now gym members in the UK, with strong growth across all age groups – particularly among younger generations who are prioritizing their health and wellbeing.”
The report shows households spend £55.26 a day on bills and other expenses – an 8 per cent increase compared to last year. Rising costs for fuel (up 18 percent), mortgages (up 10 percent) and food (up 8 percent) continue to strain budgets, while spending on school and child care has increased by 23 percent.
Even traditional fixed costs have fallen as households look for better value for money. Spending on mobile phones and top-ups fell by £10 to £29.80 a month, while broadband and phone bills fell from £46.70 to £41.20. Life insurance payments fell to £13.79 and spending on toiletries fell from £29 to £25.
MoneySuperMarket data also shows an increase in payments for loans, credit cards and workplace pensions, which Gammell said “indicates a growing focus on financial resilience”.
“Households are using their extra money to reduce their debt and invest in their future,” she said.
The change in behavior comes as inflation stabilizes at 3.8 percent and wage growth slows, prompting traders to bet on a further rate cut from the Bank of England before the end of the year, potentially leading to a cut in the key rate to 3.75 percent.
While British consumers appear to be finding some breathing room after two years of relentless price pressure, data suggests they are choosing prudence over pleasure and foregoing non-essentials to ensure their long-term financial well-being.
