1.2m Subscription Payments Cancelled Amid Cost of Living Squeeze

Since last summer British consumers have cancelled over 1.2 million subscription payments, including for streaming sites and gym memberships, as household finances come under increasing strain, Lloyds Bank said.

This “subscription audit” follows a spike in subscription signups during the pandemic. New regular subscription payments increased by 70% between January 2020 and March 2021 as consumers looked for entertainment on streaming services and embraced the convenience and safety of home deliveries.

But with lockdown restrictions eased and budgets under pressure from high inflation and soaring energy bills, consumers are now re-evaluating many of those subscriptions.

Lloyds offers its customers a subscription management service from its mobile banking app. Developed with Swedish fintech company Minna Technologies and Visa, the service is the first in the industry, Lloyds claims, and allows customers to see all the regular payments coming out of their accounts. Since June 2021, it has helped Lloyds customers to cancel more than 1.2 million payments. 

The service “makes it easy for customers to see what they are making regular payments on, with cancellation just a few clicks away,” said Philip Robinson, Director of Payments at Lloyds Bank. 

Lloyds found that nearly a fifth (17%) of its customers use the service to re-evaluate their recurring payments on a monthly basis. Customers are most likely to cull their subscriptions on Mondays, Lloyds found.

Nearly half (47.1%) of the regular payments cancelled were for TV, film, and music streaming services such as Netflix and Spotify, he revealed.

Consumers also decided they could do without subscriptions to online marketplaces (17.6% of cancellations), to weight management clubs and gyms (7.6% of the contracts ditched), and for computer software (7.1% of the payments axed).

3.8% of cancellations were for financial services, such as packaged bank accounts and credit checking.

“People are looking to take control and budget household spend,” said Philip Robinson, Director, Payments, Lloyds Bank, said.

However, just 2.6% of cancellations were for telecoms services such as home broadband and mobile phones, despite nearly every household subscribing to these services. While telecoms services have seen punishing inflation-linked price hikes this spring and up to one in five households are struggling to afford the bills, they’re seen as indispensable, especially for those whose work and education requires digital connectivity.

Lloyds’ research follows a study from NatWest that found that in late 2019 Brits were wasting on average of £39 per month on subscriptions they don’t use, with unused gym memberships and untouched mobile phones the most common pointless regular payments that come out of our accounts.

Sources