The third edition of ‘The Great Indian Wallet’ report reveals a concerning trend: a decrease in the number of savers among lower-middle-class households, coupled with a rise in expenditure of groceries and education. Despite these current financial pressures, the report highlights that middle-income consumers across India maintain strong aspirations for a better financial future.
Prepared by Gurugram-based consumer finance company Home Credit, the report surveyed over 3,200 individuals aged 18-55, representing lower middle class households (those with an annual income up to ₹5 lakh) across 17 Indian cities.
Offering insights into consumers’ financial lives, the report leverages a Financial Well-Being Index, along with detailed data on income, expenses, wallet share, aspirations and discretionary spending. The Financial Well-Being Index indicates a gradual improvement in consumers’ current financial situation, with the Current Situation Index rising from 31 in 2023 to 35 in 2024, before a slight dip to 34 in 2025.
Conversely, the Future Expectations Index demonstrates high optimism, peaking at 64 in 2024, then gently declining to 59 in 2025. “This suggests optimism tempered by uncertainty as consumers look ahead,” the report notes.
Only half of the respondents reported being able to save, a notable drop from 60 percent last year. Thirty eight per cent managed to cover expenses but could not save, while a concerning 12 per cent resorted to loans for basic needs, signalling significant “financial pressure to run the household”. The report also highlights regional disparities: consumers in most metropolitan cities earn more (₹36,000) but also face higher costs (₹23,000), whereas Tier-2 residents report lower incomes (₹30,000) and expenses (₹17,000).
Among expenditure categories, groceries remain a dominant expense, consuming 29 per cent of monthly budgets, a 12 per cent increase from the previous year. Spending on education surged by 34 per cent over the past year, now accounting for 19 per cent of the monthly wallet share. “This reflects a powerful commitment to investing in the next generation’s progress, with 40 percent of respondents actively contributing to their children’s education, and Gen X allocating 22 per cent of their monthly spending to it,” the report states.
digital tools
Regarding digital tools, the report found that 63 percent of respondents believe these tools have simplified the pursuit of financial goals, with the strongest confidence observed in Tier-1 cities such as Jaipur, Pune, and Kolkata. While physical stores still dominate product purchases such as apparel and home appliances, online channels are rapidly gaining traction for financial transactions.
However, with deepening digital adoption, vulnerabilities to online financial fraud have also increased. Nearly three-quarters of respondents reported awareness of such frauds, yet a concerning 28 per cent admitted to sharing confidential financial information with friends or family, and 25 percent store it on their smartphones. Alarmingly, “20 per cent have already fallen victim to online financial fraud, highlighting the urgent need for enhanced digital literacy and secure practices to protect consumers in the evolving digital landscape”, the report concludes.