Amid the highest inflation since the early 1980s, the UK public is increasingly worried about the cost of living crisis, with 86% of people concerned about day-to-day living costs. Rising costs are impacting all areas of our lives and the most common reasons reported for increased day-to-day living costs were: an increase in the price of a food shop (94%), an increase in gas or electricity bills (82%), and an increase in the price of fuel (77%).
Consumers have been put in a very unfortunate situation, but are generally showing incredible resilience in their response and the British public are adapting their everyday behaviours to budget more effectively. For example, 24 million people have reduced energy use in their homes between March and June 2022 as the price of gas and electricity reached record highs.
No one should be put in a position where they are worried about heating their home throughout winter, but as consumers strive to be more in control of their finances, they are also increasing their visibility over their finances. By interpreting and responding to data in this way, members of the public are becoming more and more data literate, with a high number of individuals actively responding to data on a daily basis.
From smart metres to data-informed budgeting, consumers are learning quickly that data is a critical tool in fighting back against the increased cost of living. This behavioural change is in turn improving data literacy, and encouraging us all to take a more analytical view on important topics; which starts as using data to inform our financial habits and could spread to taking informed decisions about looking after our environment, for example.
When The Going Gets Tough… The Data Gets Flowing
We are seeing an increasing reliance on data, as the public digests information in order to adapt to the current economic climate. As a result, we are seeing more and more examples of data literacy being used in everyday life.
The last occasion in which we saw data at the forefront of the lives of the British public was during the pandemic, when key pieces of data extracted from health and care settings, combined with information provided by patients themselves, was used in new ways to help the public better understand and respond to the virus. Firstly, the government and members of the public were analysing data daily around infection and hospitalisation rates to determine behaviour, and then later, data was relied on for antibody testing, track and trace etc.
Now, the public faces another critical period and is once again looking to data for the solution. As a result, data is impacting decision-making, with the average monthly searches about the cost of living and related topics – including energy bills, food prices, inflation, interest rates, mortgage rates, petrol prices, tax cuts, and pay rises – all increasing in the month of August.
Based on the information being found, consumers are taking action. For example, Reports are showing an increasing reliance on the data from smart metres, which come with an in-home display tracking energy use in pounds and pence in real time. Reports are showing that real-time third of households with a smart metre is using their in-home display more than usual this winter, with 55% reporting that they know how to use their in-home display to help manage their daily energy use. The public is then using this data to spearhead conversations with their households and improve their lives, such as turning lights off in a room no one is using (60%) or only boiling the water they need in the kettle (51%) to save valuable money.
Fundamental data literacy skills are having an important effect in our everyday lives as we look to respond to the cost of living crisis.
What is the tolerance level of the UK public?
What’s interesting to me about this increased use of data amongst the public is that it seems that British consumers have a certain level of spending they’re happy with, and it's only once costs or prices go over the predetermined, internal level that they deem acceptable, that they turn to research and data to regain control.
This is supported by the change in behaviour since the cost of living crisis, which has consequently driven a 467% spike in people searching for 'how to reduce energy bills’ online. Clearly, once bills and payments reach unmanageable levels, the public is more likely to turn to data-driven decision-making. I like to imagine it as a data dashboard being constructed in the minds of individuals and households, so they can track what spending they are happy with and then alter their behaviour accordingly.
Consumers taking back control
Organisations have relied on data to overcome issues for a long time, whether that is the government using accurate data daily to design effective countermeasures for the pandemic, or big businesses investing in big data initiatives to become more data-driven and reduce costs.
Now, as the public is increasingly facing stressful situations, be that the pandemic or the rising cost of living, they are also turning to data to save money and regain control. This is an example of data literacy being used as a key skill to encourage data-driven decision-making in people's everyday life and is one way that consumers can regain control of how much they are spending and on what during these difficult times.
In the future, I look forward to data being utilised by the public, not just in times of hardship, but as a resource they rely on daily and use to improve aspects of their lives. If data literacy can become a more widely used and understood skill by the general public, the UK can begin to benefit, for example, individuals interpreting data to make sure they live more sustainably, or demanding improvement in data privacy policies from big organisations.
