Monthly Archives: October 2026

There is a particular kind of spending that has become part of everyday culture over the last few years.

The coffee on the way to work. A nicer lunch than you really needed. A new book, a bunch of flowers, a takeaway on Friday night or something small ordered online after a difficult week.

Individually, none of these purchases is especially significant. Collectively, they have become part of what is sometimes called the “little treat economy”, where relatively modest indulgences provide a small moment of enjoyment when bigger purchases feel increasingly difficult to justify.

And there may be more behind it than simply poor budgeting.

Capgemini’s latest global consumer research found that seven in ten consumers treat themselves to small indulgences as a way of coping with financial pressures. At the same time, consumers are becoming much more deliberate about where they spend their money. Capgemini

So perhaps the interesting question isn’t why we keep buying little treats.

It is what those purchases are doing for us.

When the bigger things feel further away

For previous generations, financial progress was often associated with fairly obvious milestones: buying a home, moving to a larger one, starting a family, upgrading the car or taking a big annual holiday.

Many of those goals remain important, but they can also feel increasingly expensive or distant. When the bigger reward is years away, spending a relatively small amount on something enjoyable today can feel much easier to justify.

There is a behavioural logic to this. Human beings tend to value rewards that are immediate and tangible. Saving £8 towards something years away does not provide quite the same emotional response as meeting a friend for coffee this afternoon.

That doesn’t necessarily make the coffee a bad financial decision.

In fact, one of the more interesting consumer trends emerging in 2026 is a move away from simply asking whether something is cheap or expensive and towards asking whether it feels worth it.

TikTok’s 2026 trend report calls this “emotional ROI”, describing shoppers as increasingly judging purchases by the enjoyment, usefulness or meaning they receive in return. The same report identifies a growing #richinlife trend, where people define richness less by conspicuous consumption and more by the experiences and choices that make life feel fulfilling. TikTok For Business

That feels like a much more interesting financial question than whether somebody should stop buying coffee.

The problem with treating enjoyment as the enemy

Personal finance advice can sometimes make everyday spending sound like a character flaw.

Cancel the subscriptions. Stop eating out. Make coffee at home. Never buy lunch. Cut out everything unnecessary and put the difference into savings.

There is obviously nothing wrong with looking carefully at spending, particularly when money is tight. But taken too far, this creates a slightly strange idea of financial success in which the objective is simply to spend as little as possible.

Most people do not want money purely for the satisfaction of seeing a larger number on a statement. They want what money makes possible.

Interestingly, recent UK consumer research suggests that experiences remain high on that list. KPMG found that, after holidays, days out were one of the biggest priorities for summer spending, followed by eating out and entertaining friends and family at home. KPMG

Those are not necessarily examples of financial indiscipline. They are examples of people spending money on their lives.

The £5 purchase probably isn’t the real problem

There is another reason to be wary of obsessing over every small indulgence.

It can distract from the decisions that actually have the greatest effect on our finances.

How much are we spending on housing? Are we carrying expensive debt? Are we saving regularly? Are there subscriptions or insurance policies we genuinely no longer use? Are we making thoughtful decisions about the large purchases that cost hundreds or thousands of pounds?

Those questions are likely to matter considerably more over the long term than whether somebody bought lunch twice this week.

That doesn’t mean small spending is irrelevant. Hundreds of unnoticed purchases can clearly add up. But there is an important difference between unconscious spending and deliberate enjoyment.

If you spend £30 every month on something you barely notice, perhaps it deserves questioning.

If you spend £30 doing something you genuinely value with somebody you care about, that may be doing exactly what money is supposed to do.

From “little treats” to intentional spending

There are signs that consumer culture itself may be moving in this direction.

After years of haul videos, viral products and algorithm-driven shopping, some social media trends are beginning to celebrate the opposite. “Underconsumption” content has encouraged people to use things for longer, repair what they own and resist buying every new product that appears in their feed. More recently, the conversation has begun shifting again towards purchases that people consider genuinely worth the money. British Vogue

The common thread is intention.

Rather than asking, “Can I afford to buy this?”, the better question might sometimes be, “Do I actually value this?”

That small change can make spending decisions much clearer.

You may discover there are things you happily spend money on because they genuinely improve your life, alongside other habits that have simply become automatic.

A financial plan should leave room for living

This is perhaps where the idea connects most naturally with financial planning.

A good plan should not simply tell somebody how much they need to save for a future that may be decades away. It should also help them understand what they can afford to enjoy now.

That balance will look different for everyone. One person may care deeply about travelling. Another might prioritise good food, hobbies, family days out or going to live music. Somebody else may happily spend very little on all of those things because what they value most is the security of knowing they have money put aside.

None is inherently more financially responsible than the others.

The important thing is that the choice is conscious.

Perhaps, then, the lesson of the little treat economy is not that we should stop treating ourselves. Nor is it that every small indulgence can be dismissed because “life is for living”.

It is that money works best when we understand what we want it to do.

Saving for tomorrow matters. So does protecting ourselves against the unexpected.

But a financial life in which every pleasure is postponed indefinitely probably isn’t much of a financial plan either.

When we buy most things, price is an obvious place to start.

If two products appear to do the same job, choosing the cheaper one seems perfectly sensible.

But pensions are slightly different.

The Government and Financial Conduct Authority are currently developing a new Value for Money framework for workplace pensions. One of the ideas behind it is surprisingly simple: judging a pension purely by what it costs doesn’t necessarily tell you whether it is delivering good value.

The proposals are intended to encourage greater consideration of the outcomes savers actually receive, including investment performance and the quality of services provided, rather than focusing predominantly on charges. GOV.UK

And that raises a much broader question.

What does good value actually mean when it comes to your money?

Cost Matters, But It Isn’t the Whole Story

Charges matter because every pound taken in fees is a pound that isn’t invested for your future.

Over many years, seemingly small differences in costs can add up.

But looking at cost in isolation can be misleading.

Imagine two pensions. One costs slightly less than the other, but the more expensive pension offers a different investment strategy, better functionality or services that are more appropriate for the person using it.

Simply looking at the headline charge wouldn’t tell you which represented better value.

The same principle applies much more widely across financial planning.

The cheapest option and the best-value option are not necessarily the same thing.

What Are You Actually Paying For?

This is where the conversation becomes more interesting.

With any financial product or service, it’s worth looking beyond the headline percentage and asking what you are actually receiving in return.

With a pension, that might include the investment options available, how those investments have performed, the quality of administration, the flexibility available when you eventually want to access your money and whether the pension continues to suit your circumstances.

And when financial advice is involved, value becomes broader still.

An adviser isn’t simply there to select an investment.

They might help someone understand whether they’re saving enough, make use of appropriate tax allowances, structure their retirement income, avoid unnecessary tax, plan for their family or simply provide reassurance when markets become uncomfortable.

Some of those things are relatively easy to measure.

Others aren’t.

The Value of Avoiding the Wrong Decision

There’s another part of financial value that rarely appears neatly on a statement.

It’s the decisions you don’t make.

Selling investments during a market fall. Taking too much income from a pension too early. Holding money in an unsuitable place for years. Missing an allowance. Making a decision based on a frightening headline rather than your long-term plan.

Good financial planning isn’t only about trying to make your money grow.

Sometimes its value comes from helping you avoid decisions that could take you further away from what you’re trying to achieve.

Value Is Personal

Perhaps the most important point is that value will not look identical for everyone.

Someone in their thirties building a pension may care predominantly about long-term growth, appropriate investment choices and costs. Investments usually fluctuate in value. Over shorter periods, this means the value of investments can go up and down. Historically, investors who remain invested for longer periods have been more likely to achieve positive returns, although this is not guaranteed.

Someone approaching retirement may place much greater value on understanding how much they can afford to spend and how their different pensions, savings and investments can work together.

Someone later in retirement might be thinking about family, inheritance and how their wealth should eventually be passed on.

The numbers matter in every case.

But so does what those numbers are there to achieve.

Looking Beyond the Price Tag

The Government’s proposed Value for Money framework is specifically concerned with workplace pensions, but the principle behind it is a useful one for all of us.

Price matters.

Performance matters.

Service matters.

And, ultimately, outcomes matter.

When you’re making decisions that could affect your finances for decades, the better question isn’t always:

“What’s the cheapest option?”

It might be:

“What am I getting for what I’m paying, and is it helping me achieve what I actually want?”

That is a much more useful definition of value.

The Government’s current consultation on the Value for Money framework can be found here: Value for Money Framework consultation on GOV.UK

For a long time, keeping large amounts of money in cash came with an obvious drawback: interest rates were extremely low.

That has changed. Some fixed savings accounts are currently offering rates above 5%, while Moneyfacts reports that fixed savings rates have strengthened again. At its latest meeting on 17 September, the Bank of England held Bank Rate at 3.75%, although three members of the Monetary Policy Committee voted to increase it to 4%.

For savers who remember earning next to nothing on cash, that can make today’s rates look particularly attractive. And it raises a perfectly reasonable question: if I can earn a decent return without taking investment risk, why would I invest at all?

The answer comes down to what the money is actually for.

Cash Has an Important Job

Cash should form part of most financial plans because money that may be needed at short notice generally needs to be accessible and relatively predictable. That could include an emergency fund, money set aside for a house move, a holiday or other known expenses over the next few years.

If you are planning to replace the car next summer, for example, exposing that money to short-term market movements may not make much sense. There is real value in knowing that £20,000 will still be there when you need it. But that does not necessarily mean cash is the best home for money you may not need for another 10, 20 or 30 years, where a longer time horizon can change what is appropriate.

A Good Interest Rate Isn’t the Same as Long-Term Growth

Today’s savings rates look attractive partly because of what came before them. For much of the period following the financial crisis, interest rates were exceptionally low, so the current environment feels very different. But cash rates move over time, often in response to changes in the Bank of England’s Bank Rate and wider economic conditions.

At its September meeting, the Bank of England held Bank Rate at 3.75%, although three of the nine members of the Monetary Policy Committee voted for an increase to 4%. The Bank also highlighted increased risks to the inflation outlook, which is a useful reminder that the direction of interest rates is never guaranteed.

An attractive savings rate today therefore tells you relatively little about what cash might earn over the next decade. Investment decisions, by contrast, are generally made with a much longer time horizon in mind, so it is important not to let a particularly attractive short-term savings rate drive a decision about money intended for many years into the future. Investments are designed to help grow your money for the future over the longer term. You should keep in mind that both are exposed to market movements, meaning values can go down as well as up, and you may not receive back the full amount invested or saved into a pension.

Inflation Still Matters

There is another number worth considering alongside the interest rate on your savings account: inflation. UK inflation currently stands at 3.1%, according to the Bank of England. If your savings are earning 4% while prices are rising by roughly 3%, the purchasing power of your money is not actually increasing by the full 4%.

That does not make cash a bad option, but it does mean the headline interest rate does not tell the whole story. Over longer periods, the objective of investing is generally not simply to preserve the number sitting in an account, but to give money the opportunity to grow faster than inflation. That potential for higher long-term growth comes with risk, of course, and the value of investments can fall as well as rise, particularly over shorter periods.

The Question Shouldn’t Be Cash or Investments

This is where financial planning becomes more useful than simply comparing rates. The question is rarely just whether you should hold cash or invest. A more useful question is how much of your money needs to remain in cash, and how much could be working towards longer-term goals.

The answer will depend on your circumstances. Someone approaching retirement may understandably want a larger cash reserve than somebody in their thirties with decades before they expect to access their pension. Likewise, someone planning to buy a house next year will have very different priorities from someone investing for grandchildren who are still at primary school. The right balance depends on what the money is for, when it may be needed and how comfortable you are with investment risk.

Don’t Let Today’s Rate Make a 20-Year Decision

Periods of higher savings rates can create an interesting temptation. Cash feels safe, the return is visible and, compared with markets that move every day and occasionally produce uncomfortable headlines, it can seem entirely rational to leave long-term money sitting in cash while waiting for a “better time” to invest.

The difficulty is that nobody reliably knows when that better time will arrive. A decision made because of today’s savings rate can end up shaping what happens to your money for many years, which is why separating money by purpose and timescale can be so useful. Cash may be more appropriate for money you are likely to need in the near term, while investments can be better suited to money that has time to ride through the inevitable ups and downs of markets.

Different Money, Different Jobs

Cash and investments are not really competitors because they serve different purposes. Cash can provide certainty, accessibility and peace of mind, while investments offer the potential for longer-term growth. For many people, a sensible financial plan will therefore include a combination of both, with each playing a different role depending on when the money may be needed and what it is intended to achieve.

So rather than asking whether today’s attractive savings rates mean investing no longer makes sense, the more useful question might be:

What job do I need this particular pot of money to do?

Once you know that, deciding where it should sit becomes much easier.

Approver Quilter Financial Services Limited September 2026