A third of UK consumers are set to cancel holidays and home improvement projects in 2023, as discretionary income continues to erode and the country faces the prospect of a long recession.

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More than 30% of consumers plan to set aside extra money in 2023 to cope with rising prices

With inflation still hovering in double digits and outpacing earnings growth, consumer discretionary income eroded by a further £100 per month in November, according to the latest Retail Economics-HyperJar Cost of Living Tracker.

Nearly three in five consumers are worried about their personal finances heading into 2023 and more than 90% expect to be impacted by the prospect of a long, looming recession, which is expected to stretch over most of next year and beyond. 


Consumers are expecting to be affected by the economic downturn for at least the next 17 months, leading to more than 30% setting aside extra money to cope with rising prices next year. However, the data found that half (50%) cannot afford to save – a figure that rises to 77% among more economically vulnerable households. 

The tough economic conditions are already taking a toll on consumer spending plans next year, with 71% of survey respondents expecting to make changes to next year’s holiday plans and nearly a third planning on cancelling them altogether. 

A third of consumers are also planning on cancelling or postponing major household renovation projects in 2023 as household costs rise. Those consumers looking to spend in this category are looking to purchase energy-saving devices – with 45% eyeing up air fryers and heated clothing airers. 


Retail Economics chief executive Richard Lim said: “Over the past few months, the narrative around the challenges facing UK families has shifted from a crisis affecting the most disadvantaged to one which engulfs the middle classes. Indeed, the rapid rise in interest is a particular concern for those looking at remortgaging over the next 12 months which is likely to impact over two million households.

“There’s going to be a period of readjustment. Fear of the unknown will heighten consumers’ anxieties about making big-ticket purchases until clarity over their financial security is established. Meanwhile, a softening in house prices will damage confidence, discouraging borrowing while at a time when lenders will also start to raise the requirements bar.”