Moneyhub, a payments platform, has released new data which reveals how Britons’ spending habits are changing during the cost-of-living crisis.
It could be boom times ahead for health insurance brands, as the rich decide that private healthcare is a better option than taking your chances with the strike-prone, waiting list, uber-woke NHS.
Dental plans are surely another area where insurance brands can offer a viable and affordable alternative to the disappearing NHS dentist network. The demand is certainly there and social media channels offer a ready made – and cheap to use – marketing platform. On the downside for insurers and brokers people are spending less on their pets, which makes pet insurance an even tougher sell in these inflationary times.
The Moneyhub data was gathered by analysing trends of anonymised user data from a sample of users of Moneyhub’s Open Data-powered personal finance technology platform.
The data reveals:
- A 52% increase in spending on healthcare in higher income users earning more than £51,000 per annum – with no significant increase in other income groups.
- Lower income users earning less than £21,000 per annum £1,750 per month) spent 34% less on pets in Jan 2022 than they did in January 2023, reducing their monthly spend from £104 to £68.
- Aldi and Lidl have the number of shoppers increased by 19% and 17% between January 2023 and Jan 2022.
- Morrisons and Waitrose have seen decreases of 10% and 17% respectively.
- Utility bills are up 18% and car fuel spending is up 39% in January 2023 compared to January 2022.
FCA CONSUMER DUTY
This year, the FCA’s new Consumer Duty comes into force, requiring financial services firms to avoid ‘foreseeable harm’. A Moneyhub survey found that 87% of senior figures at banks and building societies agreed that the regulations “will have a significant impact” on their businesses.
During the ongoing cost-of-living crisis, lenders will come under increased pressure. The Duty will also place new expectation on firms, which must urgently act to address issues around affordability, vulnerability, and customer outcomes.
Open Banking and Open Finance enable customers to share data with lenders to provide a holistic, accurate, timely, and forward-looking assessment of income, expenditure and affordability. They will also help firms to ensure Consumer Duty compliance, says Moneyhub.
IE COMMENT
The bigger ethical question for insurance brands regarding the FCA Duty will most likely come down to deciding who can actually afford to insure assets, their life, healthcare, home, car etc. In an era of organised rationing, will consumers blame insurers for the refusal to offer cover, or the FCA? How will consumer champions like Martin Lewis portray the insurance industry’s interpretation of the new FCA Duty?
It will reflect badly on insurers if, for example, they state that the new FCA rules forbid them to offer car insurance to a cash-strapped single parent who is in debt. But that is EXACTLY what the FCA Duty demands in terms of assessing affordability and protecting consumers from getting further in debt.
Square that circle live on Sky News if you dare.
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