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According to research from Nationwide, the arrival of spring has seen people spending again and bringing their wallets out for air. The breakdown of their spending patterns may give an insight into current and future concerns.

Essential versus non-essential spending

Overall, Nationwide members made just over 217 million transactions with a combined value of almost £8.1 billion. This was 16% higher than in February. Of these approximately 90 million transactions were on non-essential purchases. These had a combined value of almost £2.8 billion.

The breakdown of non-essential spending

In terms of both value and volume, the biggest increase by far was in the category of gardening. It increased 83% in value and 52% in volume compared to February. This makes complete sense given that the arrival of spring is one of the busiest times in the gardening calendar.

The next highest increase in value was for charities. People spent 44% more on donations than they did in February and made 21% more transactions. Unfortunately, Nationwide was unable to give details of where the donations went. Given the timing, however, it seems likely that the increased spend could have been prompted by the situation in Ukraine.

The third-highest increase in value was for holidays. It saw a 19% increase in transaction value and a 21% increase in transaction volume compared to February. This is welcome good news for the travel industry. Its struggles are reflected in the fact that the spending figures are a 247% value increase and a 375% volume increase on March 2021.

Categories related to leisure and recreation generally did well. The sole exception was dating. It only managed a 9% increase in both value and volume compared to February. Cruises are probably worth a special mention. Transactions increased 17% in value and 25% in volume compared to February but 505% and 254% compared to March 2021.

The breakdown of essential spending

The biggest increase in both value and volume was in childcare (26% and 25%). This may be due to more people returning to on-site work. The next biggest increase in value was debt at 16%. It also increased by 14% in volume. Interestingly, payments by credit card also increased 17% in value and 16% in volume.

The third biggest increase in value was motoring at 20%. It also saw a 10% increase in volume. Motoring is classed separately from fuel/EV charging which increased 16% in value and 12% in volume. The increase in motoring costs may reflect people choosing to upgrade to electric and/or more fuel-efficient cars.

Similarly, the cost of essential travel increased 19% in value and 16% in volume. This is probably a reflection of businesses opening up again and bringing back more of their workers. The range of increases in other categories was highly variable.

Value increases ranged from -3% (utilities and bills) to 18% (both TV, phone and broadband and discount stores). Volume increases ranged from 0% (utilities and bills) to 19% (TV, phone and broadband).

The overall picture

It’s unclear what to make of these figures. On the one hand, they could indicate that the majority of Nationwide customers are at least keeping their heads above water. On the other hand, the increase in debt and credit card usage is a potential red flag. It could be an indicator that people are being forced to turn to debt to make ends meet.

With that said, it could also be an indicator that people are feeling more confident about their finances. This is leading them to take on debt, potentially for non-essential purposes so that they can make the most of post-COVID19 freedoms. In particular, it may be linked to the growth in leisure and recreation, especially travel.

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