13 Nov 2022
Younger generations regret subscriptions and recurring payments they signed up to during pandemic as cost of living bites
32% of people aged 18-34 regret buying subscriptions during the pandemic, while 41% fear these regular subscription payments could push them into debt
According to research from subscription and bill management app, Little Birdie, a third (33%) of 18-34 year olds fear they can’t afford to keep paying for their current subscriptions and recurring payments, compared to a quarter (25%) for the UK average
People took out more subscriptions during lockdowns for several reasons, including convenience and reduced spending elsewhere
Two thirds (65%) of people say that it should be easier to break a subscription contract if someone is struggling financially during cost of living crisis
London, UK, 13 November 2022 – People across the UK are now questioning the subscription services they signed up to during the pandemic, with fears these could push them into debt as households struggle with soaring costs.
These figures are particularly high among the 18-34 age group with 32% saying they regret buying these subscriptions (compared to UK average of 19%) and 41% of this group fearful of falling into debt (compared to 27% UK average).
Meanwhile a third (33%) of 18-34 year olds say they simply can’t afford to keep paying their current subscriptions and recurring payments, compared to a quarter (25%) for the UK average.
The research – which was commissioned by the new subscription and regular payment management app Little Birdie – surveyed thousands of people across the UK.
The pandemic accelerated the growth of free trial and new subscription adoption for several reasons including convenience and reduced spending elsewhere. Recent research found that two thirds (65%) of UK homes are signed up to regular subscription services, with an average of seven contracts per household. Now, findings from a Little Birdie survey* suggests that the average household has between 10- 20 subscriptions and regular payments when you include utility bills, mobile phones, broadband, and other costs such as mortgages.
With inflation now hitting almost 10%, soaring interest rates, and the cost of living spiralling, six in ten (60%) people across the UK want to cut back on unnecessary spending to prepare for future living cost rises, while a similar proportion (63%) are actively trying to cut down on spending.
The difficulty is that cancelling subscriptions or contracts can be a complicated and lengthy process. Alarmingly, a quarter (26%) of all people avoided cancelling or switching their paid subscriptions due to hidden costs, with this figure rising to four in ten (41%) for 18-34 year olds. Meanwhile, a quarter (24%) find it too difficult to cancel subscriptions and recurring payments as they take too long to do so.
There is now a clear desire for greater guidance and transparency surrounding subscriptions and recurring payments. Two thirds (65%) of people say that it should be easier to break a contract if someone is struggling financially during the cost of living crisis. And eight in ten (79%) say there should be more reminders when people are reaching the end of their free subscription trial period to protect people from additional costs.
Martin Bould, Little Birdie’s Co-founder, said: “We’re in the middle of a severe economic crisis. Household budgets are at breaking point, and many – younger people in particular – are at risk of falling into debt due to the current climate, which isn’t being helped by recurring payments they’re tied into.
“While subscriptions can be excellent value for money and can offer a convenient way for people to access needed products and services, the issue is that they can be challenging to monitor, and subscription management can be complicated. Many people sign up on a discounted rate or for a free trial, but find it too difficult – or simply forget – to cancel. And companies don’t often make the cancellation process easy.
“We launched Little Birdie to help people take control of their regular bills and subscriptions. It keeps track of subscriptions and helps people manage their budgets – something people need now more than ever. As well as providing more guidance on how to cancel unwanted regular payments and enhancing our Click to Cancel feature, we’ll continue to develop tools that make it easier than ever for busy households to manage their finances.”
Little Birdie is a personal subscription and bill management app. Little Birdie’s free app will allow people to cancel subscriptions directly with almost 400 providers – including Spotify and Disney+ - with many more available in the coming months. It also reminds users when payments are due, when a free trial is coming to an end, and when there is a price rise. Little Birdie also scours the internet to find its users better, money saving deals and help them switch provider.
Personal finance and consumer rights expert, Martyn James, said: “Rising bills and inflation are having such a big impact on the people that I speak to that they are looking at all avenues possible to cut back.
“While investing in a new kettle might help cut energy bills, if people really want to save money they must look elsewhere and get creative. And one of the best places to start is looking by at regular outgoings such as subscriptions. I’d warn everyone to look for companies micro-charging them - the act of billing people small amounts for goods or services in the hope that they either don’t mind or won’t notice, or for paying for too much unneeded cloud storage.
“Having a centralised place – such as an app - to view these outgoings is a must for all households during the current economic climate.”
Below are Martyn James’s top tips for people when it comes to checking and reviewing bills and subscriptions:
Free trials don’t mean free money. Lots of people sign up for free trials, from paid-for health apps to beauty products. Many firms start to charge you after a few months, or sometimes as little as seven days. Just because you’ve signed up doesn’t mean you are locked into a contract so cancel as soon as you spot the subscription.
Get to know your phone bill. Little Birdie can help you track down subscriptions you might not have realised you’ve signed up to. But did you know that some firms also sneakily debit you through your phone bill? Lots of people don’t even know their online phone bill log in details. Get acquainted with them and get rid of those sneaky subscriptions.
Get some cash back. If you didn’t authorise a business to debit your account, then they should give you back your cash if they can’t prove they have permission to do so. This is particularly true if the amount you are debited varies (subscription ‘traps’). You might even get interest. Call your bank or card provider and tell them you didn’t ‘authorise the transaction’. You’re also able to cancel transactions directly through Little Birdie.
Check your account each month for mystery debits. Some subscriptions dodge detection because they look like normal transactions on your account or use unusual codes that don’t look like regular payments. Little Birdie will find most subscriptions on your accounts, but get in to the habit each month of checking your statements just in case a business is doing its best to remain undetected.
ENDS
Methodology:
Opinium research of 2,000 UK adults weighted to be nationally representative. Research undertaken between 15-19th September 2022
* Little Birdie Survey of 313 people via Survey Monkey in February 2021
About Little Birdie
Little Birdie is a personal subscription and bill management app designed to save people money by putting them in charge of their household finances, bills and subscriptions.
Founded in October 2022, Little Birdie follows a simple mantra: ‘subscriptions managed, money saved, life simplified’, acting as a trusted adviser for time-poor people, taking regular audits of users’ subscriptions and regular payments in real-time through open banking.
Little Birdie allows people to cancel subscriptions directly in the app, and it reminds users when payments are due, when a free trial is coming to an end, and when there is a price rise. Little Birdie also provides users will alternatives on money saving deals.