What did you spend your last bonus on? That’s assuming, of course, your company was offering them; many find themselves in the position of being unable to extend bonuses as spiralling costs and the uncertain macroeconomic environment hit profits.
Businesses aren’t the only ones feeling the pinch. New data from fintech CleverCards indicates that people are still spending at least part of their bonuses on day-to-day expenses such as fuel, utilities and travel.
The proportions have certainly decreased from last year, when rising interest rates and inflation were turning the screws on the average consumer, but bonuses are still being used for essentials rather than frivolous expenditure. And the Irish fintech said it expects it to swing back towards the more practical spending again next year.
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CleverCards looked at anonymous data from cards that had been bought by small and medium-sized companies to use as part of the €1,000 tax-free bonus scheme. An analysis of spending on about 75,000 of the company’s prepaid Mastercards showed food and dining topped the list at 29 per cent of the spend in the sample, with general retail at 16 per cent and clothing expenditure accounting for 14 per cent.
Health and wellbeing was 6 per cent of card spend. For the more practical expenses, card users were spending 5 per cent and 4 per cent on general supplies and fuel respectively, while 3 per cent went on travel and transport – and not the fun, holiday-focused type of transport. Airlines also accounted for about 3 per cent of spending.
It may only be a snapshot of CleverCards customers, one of several providers in the market, but it provides some insight into the spending priorities of consumers who are still coming under pressure from day-to-day costs.
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The CleverCards predictions for more practical spending next year may come to pass. But there may be some respite. A recent report from the Irish League of Credit Unions predicted that shoppers were likely to adopt a mood of “managed caution” this Christmas rather than opt for big cutbacks.
And there is speculation that the European Central Bank will cut interest rates in the second half of the year, albeit at a slower rate than the bank has hiked them in recent months. Who knows what effect that will have on the spending outlook in 12 months’ time?
