UK households are preparing for significant reductions in discretionary spending throughout 2026, a move largely prompted by persistent increases in the cost of living. A comprehensive annual survey, involving 2,000 adults and conducted by savings and investment platform Moneybox, reveals a widespread intention to curtail non-essential expenditures such as takeaways, streaming subscriptions, and social outings. This strategic belt-tightening reflects a proactive approach to managing personal finances amidst ongoing economic pressures.
The imperative for these cutbacks becomes clear when examining recent financial shifts. The survey highlights a substantial 14% rise in monthly grocery bills, climbing from an average of £313.09 to £355.66. Even more pronounced is the surge in housing costs, with average monthly expenditures on rent and mortgages increasing by 24%, from £531.97 to £657.58, between 2024 and 2025, underscoring the escalating financial burden on families across the nation.
In response to these escalating costs, many Britons have already initiated spending adjustments. Data indicates a 9% reduction in takeaway expenditure, with monthly outlays decreasing from £77.58 to £70.72. These intentional cuts aim to free up capital, enabling households to advance towards critical financial objectives. Primary goals include bolstering emergency funds (28%), increasing retirement savings (20%), and funding home improvements (18%).
Despite the backdrop of rising living expenses, a notable 37% of respondents reported feeling financially better off at the close of 2025 compared to the start of the year, significantly outweighing the 19% who felt worse. This improved sentiment is attributed to several factors, including tangible progress towards financial goals (31%), enhanced budgeting practices, healthy returns on investments (28%), receipt of pay rises (28%), and successful debt reduction efforts (21%).
Looking ahead, optimism prevails, with 57% of those surveyed expecting further financial improvement in the coming year. This positive outlook is underpinned by concrete strategies: 47% plan to save more, while 28% express increased confidence in their money management abilities. A further 26% have established clear monetary goals for 2026, and 24% report a stronger drive to take control of their financial futures, indicating a shift towards more deliberate financial planning.
The survey also highlighted a growing confidence in investment, with 32% of households actively investing in 2025 and a striking 65% feeling more assured in their investment decisions compared to the previous year. This increased confidence stems from improved financial literacy (44%), successful re-entry into the market after positive past returns (35%), increased savings contributing to investment capital (33%), and a perception of enhanced market stability (25%).
Brian Byrnes, director of personal finance at Moneybox, emphasised the profound impact of consistent financial habits. He stated, “Regularly reviewing your spending is one of the simplest and most powerful ways to build better financial habits. Small changes made consistently can unlock money you didn’t even realise you were spending.” Byrnes added that even modest shifts, such as dedicating 30 minutes weekly to personal finances, can yield significant long-term improvements.
A spokesperson for Moneybox further commented on the evolving consumer mindset, noting, “What this research shows is that people aren’t just tightening their belts, they’re becoming far more intentional about their money.” The spokesperson underscored that while rising costs necessitate tough choices, growing confidence, fuelled by clarity on goals and decisive action, is transforming good intentions into improved financial outcomes for many.
The findings collectively paint a picture of UK households adapting to economic realities by adopting more disciplined and strategic financial behaviours. This includes not only curtailing non-essential spending but also embracing active financial management and investment, driven by a desire to achieve long-term security and prosperity.
