Brits ditch costly subscriptions en masse due to fast-shrinking budgets
New figures out this morning show that the growth of the “subscription economy” is stalling rapidly as living costs squeeze household budgets and people return to pre-coronavirus pandemic routines.
More than a third (36%) of people say they have cancelled at least one subscription because their disposable income has fallen as interest rates and inflation climb, with 31% citing higher prices as a reason why, according to Barclaycard Payments.
Entertainment platforms and beauty and grooming kits are among the categories most likely to have been cut back on.
The proportion of households signed up to subscriptions has dipped from around four in five (81%) a year ago to two-thirds (67%), according to Barclaycard Payments.
It released the findings after commissioning Opinium Research to survey 2,000 people across the UK in June. Some 400 UK senior decision-makers at director level and above from a range of retail sectors were also surveyed.
Barclaycard Payments – which processes £1 in every £3 spent on credit and debit cards in the UK – found that, on average, businesses which offer subscriptions estimate nearly two-fifths (36%) of their revenue has been generated from these sales over the past 12 months.
However, with people going back to some pre-pandemic routines, Barclaycard data showed a 5.7% fall in subscription spending in May 2022 when compared to May 2021.
The research also indicated the appeal of sign-up products and services remains strong, despite economic uncertainty.
Nearly four in 10 (38%) people believe subscriptions offer good value for money and 34% said they help them manage their finances at a time of rising costs.
Convenience (42%), reassurance that key products will be regularly delivered (42%) and the ability to try new items which they may not normally purchase (55%) were also cited as key benefits.
