Millions of people in the UK are in denial about the financial headwinds they face in their household finances because of rising inflation and the impending increase in the energy cap. While many people are taking steps to cut their spending, others are not. Research by Grant Thornton and Retail Economics found that UK adults fall into one of four financial personas, with 25 per cent described as “squeezed spenders”. People in this group face financial pressures but seem unfazed by rising prices. They are unwilling to adjust their spending to adapt to higher living costs or build up an emergency fund.

The authors conclude: “This cohort tend to live in the moment, [are] likely to dip into savings, increase their borrowing, or use buy-now-pay-later schemes to make non-essential purchases as they tend to not let money worries impact their spending habits.”

Squeezed spenders recognised that making economies or delaying big purchases was necessary, the research found, but their “carefree attitude” made them reluctant to do so. “Typically urban and middle-income, these consumers are a mix of ages.”