UK Consumers Brace for Winter Signs of a Spending Slowdown - precautionary savings are increasing

27th September 2025

As autumn begins, new data suggests that British consumers are already tightening their belts in anticipation of higher winter bills. From food shopping to discretionary purchases, spending behaviour is shifting, with confidence indicators pointing firmly downward.

Consumer confidence in the UK has softened noticeably over the past quarter. Deloitte’s Consumer Tracker recorded a confidence reading of -10.4 in Q2 2025, down from -7.8 in Q1.

Concerns about job security and household debt are mounting, and a recent BCG survey highlighted that households intend to cut back across nearly all discretionary categories, with dining out and entertainment most at risk.

The caution is not merely sentiment — it is translating into planned action. A PwC UK survey in spring 2025 found that around 70% of consumers expect to reduce spending in the coming months.

The average household is planning more cutbacks across categories than a year ago. The effect is visible in high-frequency data: in August, card spending rose just 0.5% year-on-year, well below earlier growth rates.

Rising grocery costs are a critical factor. Higher food prices are prompting shoppers to switch brands, use more loyalty schemes, and increasingly prioritise discounted products.

At the same time, the looming energy bills of winter weigh heavily on households. Even though government price caps provide some protection, the expectation of larger heating and electricity bills is pushing consumers to adjust spending now to create a buffer.

Non-essential items are the first casualty. Sales of clothing, electronics, and “big-ticket” goods are under pressure as consumers postpone or downsize purchases. Restaurant and leisure spending is also softening, with many households redirecting cash towards essential categories.

Not all consumers are equally exposed. Higher-income households with savings cushions may still indulge in discretionary spending, sustaining parts of the economy. But lower- and middle-income families, especially those carrying debt, are showing sharper pullbacks.

Job security concerns amplify this divide, as households facing employment uncertainty are particularly likely to reduce spending early.

The signs suggest the slowdown is pre-emptive: consumers are consciously adjusting before the real pinch of winter bills arrives. How severe the downturn becomes will depend on external factors — energy price swings, food inflation, and any government relief measures.

For now, the evidence is clear: UK households are bracing for winter, and the country’s consumer-driven economy is entering the season with caution as its defining mood.

As autumn begins, new data suggests that British consumers are already tightening their belts in anticipation of higher winter bills. From food shopping to discretionary purchases, spending behaviour is shifting, with confidence indicators pointing firmly downward.

UK Consumers Brace for Winter: Spending Cuts and Rising Savings

As the UK approaches the colder months, households are already showing signs of financial caution. Rising energy costs, persistent food price inflation, and ongoing concerns about debt and job security are prompting many to tighten spending while simultaneously building savings buffers. The result is a two-pronged shift in consumer behavior that is likely to influence retail patterns, economic activity, and broader market confidence through the winter.

Consumer Confidence Weakens

Recent data highlights a notable drop in consumer confidence. Deloitte’s Consumer Tracker recorded a reading of -10.4 in Q2 2025, down from -7.8 in Q1. Households are increasingly concerned about employment stability and household debt, while surveys such as BCG’s September 2025 snapshot indicate intentions to reduce spending across nearly all discretionary categories, particularly dining out and entertainment.

Spending Slowdown

The caution is reflected in actual spending patterns. High-frequency card transaction data shows that year-on-year growth in August was just 0.5%, a marked slowdown from earlier months. Essentials remain under pressure, with households adjusting shopping habits to cope with higher food and utility costs. “Big-ticket” items such as electronics, cars, and home improvements are being postponed, while discretionary spending on restaurants and leisure activities has softened.

Precautionary Savings on the Rise

At the same time, many households are deliberately increasing savings in anticipation of higher winter costs. Surveys, including PwC’s spring 2025 Consumer Sentiment report, indicate that around 70% of consumers plan to reduce spending in the coming months, often explicitly to set money aside for future bills. Deloitte’s Consumer Tracker similarly notes that while some households have extra disposable income, much of it is being held rather than spent, reflecting a precautionary mindset.

Banking and finance data reinforce this trend. UK Finance reports modest increases in savings and ISA deposits, suggesting households are actively building buffers. Behavioural shifts, such as increased use of loyalty schemes, bulk buying, and careful brand-switching in groceries, further free up funds for precautionary savings.

Several factors explain this cautious approach

Despite government price caps, wholesale energy volatility and anticipated winter bills are leading households to save in advance.

Rising grocery prices are prompting consumers to reallocate spending and build buffers.

With uncertainty over employment, households are adopting conservative financial strategies to mitigate risk.

It is important to note that the ability to save and cut discretionary spending is unevenly distributed. Middle- and higher-income households can divert spending into precautionary savings, while lower-income families often have little room to maneuver, sometimes resorting to credit or reducing essential purchases to cope.

The combined trends of spending slowdown and rising precautionary savings suggest a muted retail environment through the winter months. The magnitude of the slowdown will depend on the trajectory of energy prices, food inflation, and any government interventions. Policymakers, retailers, and financial institutions will need to account for these twin pressures as they plan for the coming months.

UK households are entering winter with caution as the twin forces of spending restraint and precautionary saving reshape consumer behaviour.

While this approach reflects prudence among those who can afford it, it also highlights the fragility of lower-income households, for whom rising costs leave little margin for saving. The months ahead will reveal how these behaviours affect the consumer economy and the broader financial landscape.