09 October 2019
- 1 in 5 spend over half their spare monthly wages within 48 hours of getting paid
- Impulse purchases soar after payday, leaving 59 per cent with spending regrets
- 6 in 10 have less than £100 in their accounts before they get paid
- 15 per cent have no money at the end of the month, with funds running out 6 days before payday
- More than half dip into savings to sustain themselves until payday
Brits adopt a rockstar spending mindset when they get paid as new research reveals the nation burns through a quarter of all discretionary spending money with 48 hours of payday. One in five (22%) see over half their spending money (excluding bills and essential items), gone within the first two days, leaving 59 per cent of this group with spending regrets.
Nationwide’s Payday Saveday survey quizzed more than 4,000 adults1 about their attitude to spending in a bid to better understand people’s ability to save money. Britain’s biggest building society is aiming to get people saving the day they’re paid, rather than as an afterthought.
Impulse purchases become significantly more likely in the immediate aftermath of payday, with over half (55%) noting they are more likely to make unusual purchases within a week of getting paid. Three in five (59%) admitted to having regrets about their spending habits after payday and, of those who regularly make impulse purchases, a staggering 92 per cent say they’ve regretted their spending choices.
Nearly two-thirds (61%) say they bookmark items for purchase in the weeks leading up to payday, leaving them ready to splurge once the money hits their account. The most popular payday spends included larger than usual food shops, takeaways and new clothes.
||% spending immediately after payday
|Larger than usual food shop
|Getting a takeaway
|Buying new clothes
|Eating out at a restaurant
|Buying new items for my home
|Going to the pub
|Buying gifts for family members
|Buying event tickets
|Buying toys for my children
|Getting a nice lunch at work
Pressure to spend
For many, payday spending is driven by external factors, with 28 per cent saying that pressure to spend money once paid comes from their immediate circle of friends, colleagues and family. This figure rises to 59 per cent of those in the 16-24-year-old age bracket. The younger generations were also the most influenced by celebrities, with 42 per cent of those aged 16-24 saying famous people affect the amount they spend, and half (50%) saying it informs what they spend their money on each month.
Bills versus fun
Almost half of Brits (47%) split their salary between separate accounts for bill paying and spending money, with two fifths (38%) of this group getting paid directly into their spending money account. While 82 per cent have a budget for their monthly income, only 31 per cent admitted that they regularly stick to it, with nearly three quarters (71%) saying that they tend to spend more in the week after payday.
Surviving until payday
Nationwide’s research found that, for many, getting through to payday with any money left in their account is an unlikely event. More than six in ten (61%) have less than £100 in their accounts the day prior to payday – not enough to cover most emergency bills – and over half (52%) noted that they had to rely on dipping into their savings to sustain themselves until payday. However, 15 percent of people have absolutely no funds left the day prior to getting paid, with those in this group noting that on average they ran out of money six days before getting paid, leaving them struggling for close to a week.
Gemma Pauley, Head of Nationwide’s Payday Saveday campaign, said: “It’s clear that the temptation to spend like a rockstar come payday is very common. And why not – we all feel that we deserve a treat when we get paid. But how much of that is due to penny-pinching towards the end of the month due to overspending?”
“With Payday Saveday, we want to encourage people to get into the habit of saving, however little, when that pay cheque comes in. That way any unexpected bills can be covered, and that big night out, new car or holiday may be a welcome reward too.”
1Data sourced from two separate Censuswide research sets to a nationally representative section of the UK population, aged 16+.
Research set one: Study undertaken between 09.09.19 and 11.09.19 (2,003 respondents).
Research set two: Study undertaken between 18.09.19 and 23.09.19 (2,016 respondents).