The cost of keeping up with the Joneses

Impressing friends with high social spending, showing off designer clothes and splashing out on flash cars; a new study reveals that Brits are spending £45bn annually just to keep up with the Joneses. One in five (19 per cent) admit to overspending due to peer pressure, with the average person spending £5,874 beyond their means each year according to online credit monitoring service CreditExpert.co.uk.

Over a quarter (26 per cent) of Brits admit they are pressured into digging deep because they’re embarrassed about their financial situation so go along with peers to avoid questions being asked. However, being image-conscious is the main reason for Brits spending too much in social situations, with 37 per cent feeling insecure about not fitting in.

In terms of what we are spending money on, half (48 per cent) of Brits feel pressured to buy large rounds of drinks and the same amount (48 per cent) feel compelled to spend more than planned on gifts for friends and family.

One in four (39 per cent) try to impress on dates and, as a result, splash out more than they can afford – and it’s no different at work, with 38 per cent saying they contribute more money than they would like on colleagues’ leaving or birthday presents.

The study of 1,450 people also found:

Britain is a nation of fashionistas, with one in eight (12 per cent) spending more than £100 a month beyond their means on clothes

Men admit to overspending on their motors by £1,964 extra a year to keep up with their car-fashion-conscious friends. By comparison, women overspend on motoring by just £1,068.

People in the East Midlands, Wales and Scotland are the most worried about being considered tight with their money, while those in the West Midlands and North West are least bothered what people think about them.

Growing pains

Impressionable teens and young adults (18 to 24) are the most likely to succumb to peer pressure purchases. 41 per cent admit they spend over their means to keep up socially, compared to the national average (19 per cent) and almost two thirds (59 per cent) cite not wanting to miss out as the reason for their overspending.

Lavish in London, but frugal up North

The Capital’s residents are the most susceptible to peer pressure spending, with a quarter (25 per cent) saying they have spent more than they intended due to social pressures. It seems that the further North you live, the less inclined you are to succumb to keeping up with the Joneses; only 14 per cent of those in Scotland and the North East spend money they don’t want to.

Jim Hodgkins, Managing Director of CreditExpert.co.uk, said: “It’s staggering to see how much we’re overspending just to keep up with our peers. While it’s great to be generous at the bar or on a date, we should be spending because we want to and not because we feel pressured. Spending beyond your means because of peer pressure can result in mounting debts which could lead to a bad credit rating and, unfortunately, if your credit rating is unattractive to lenders, they will be less inclined to offer you credit – which means you could then miss out on the new car or flat you’ve fallen in love with.

“An online credit monitoring service like CreditExpert.co.uk can help you keep on top of your finances, provide a summary of your credit status and alert you to any changes in your credit report – helping you feel more confident about your financial commitments. You can sign up for a free, 30-day trial at www.CreditExpert.co.uk.”

Peer Pressure Overspend

The top five activities Brits spend beyond their means on due to peer pressure:

Rank – Activity - Average overspend per year (£)
1 Buying a more expensive car £1,624
2 Clothes shopping £888
3 Paying for someone else on a date, night out, day trip £660
4 Birthday, Christmas and wedding presents £600
5 Dining at a more expensive restaurant £516