Inflation surged to a 30-year peak in 2022, driven largely by rising energy costs that spread to other goods and services, squeezing household budgets. Families found it harder to maintain their standard of living and faced greater financial strain than a year earlier. In response, Línea Directa’s Homeland Security Insurer released a report examining how Spaniards were coping with soaring inflation. The report, titled Spanish households versus inflation in 2022: family spending and savings in the current economic scenario, analyzes savings strategies across three priority areas: energy, finance and food and leisure. Among the key findings, six in ten Spaniards report greater difficulty making ends meet than a year before, compared with 53% in the Valencia Community.
All Spaniards confirmed encountering more economic hardship than a year earlier, though variations exist by region. Navarra and Andalusia show the highest shares of people facing financial difficulties, while the Valencian Community records 53%. Castilla y Leon and the Basque Country report somewhat lower levels of pressure, yet still above the national average.
9 out of 10 Spaniards say they have reduced their energy consumption
The spike in energy prices weighed heavily on the 2022 household budget. The study indicates that 44% of Spaniards experienced an increase above 20% in electricity and gas bills in 2022, with Valencia residents seeing a lower rise at 38%. In parallel, nearly nine in ten Spaniards say they cut energy usage at home. For 42% of Valencia residents, the strategy was to limit consumption to essentials, while 38% shifted to cheaper time slots.
Energy efficiency remains an area for improvement in Spain. About 70% of Spaniards have not considered home improvements to boost efficiency and reduce ongoing costs, mainly due to upfront expenses. Nevertheless, 14% have installed or plan to install solar panels, and 21% intend to do so, though administrative steps slow progress.
Reducing car use is another lever to ease expenses and curb emissions. Six in ten car owners report driving less, while public transport gains traction, especially among younger people who value free train passes. In total, 35% of citizens have already requested or expect to request such incentives.
75% of community residents rely on savings
The economic stress pushes many to dip into savings. The study finds that 75% of Valencia Community residents dip into their savings at times to cover living costs, slightly below the national average. By contrast, two in ten Spaniards rely on credit, only 22% manage to save every month, and roughly a third save less than 100 euros monthly.
One practical approach to saving is switching service providers for essentials like telephone, electricity, or insurance when cheaper options appear. This is a common tactic, with half of those surveyed stating they switched suppliers due to price concerns.
People tend to change telephone or energy providers more often than banks or insurers. In this period, 27% of Spaniards plan to switch insurance providers in 2023. About half continue to spend on insurance, and 13% plan to increase coverage or seek more comprehensive products.
The tight financial climate also influences housing loans. About 23% consider locking in a fixed mortgage rate to mitigate payment risk, and 70% resist changing their current mortgage type due to concerns about a potentially worse situation.
Food and entertainment
December brings busy holiday spending on Christmas dinners and gifts for friends and family. The study shows 58% of Valencia Community residents plan to cut holiday expenditures, focusing reductions on food and gifts.
These intentions extend beyond the year, with 82% of Valencia residents signaling reduced leisure spending in the coming year, particularly in clothing, food and travel.
Six in ten Spaniards have more difficulty making ends meet than they did a year ago
Shoppers adjusted their buying choices to stretch budgets while cutting back on leisure. Roughly half of Spaniards altered their shopping mix in the past year, swapping national brands for cheaper alternatives (22%), selecting more affordable products such as frozen poultry or fish (13%), or reducing purchases of fresh meat and fish (10%).
Commenting on the study, a representative from Línea Directa Aseguradora emphasizes that the current economy and inflation are reshaping household budgets and saving habits. The organization aimed to understand how families adjust spending in energy, finance, food and entertainment in 2022 and to shed light on the most prudent choices for savings. The Home division notes it closely observes Spanish households to inform decisions that help households save more effectively.