Income 2024: Here's how much lower middle-class individuals are earning and spending now

A recent study has stated that the personal monthly income of lower-middle-class individuals is around Rs 33,000, while the monthly expenses are around Rs 19,000 at present. The study by Home Credit India (HCIN), Great Indian Wallet, was conducted across 17 cities including Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad, Pune, Lucknow, Jaipur, Bhopal, Patna, Ranchi, Chandigarh, Dehradun, Ludhiana and Kochi. The sample size was approx. 2500 in the age group of 18-55 years, with an annual income between Rs 2 lakh to Rs 5 lakh.

Hyderabad has the highest personal monthly income of Rs 44,000.  It further shows that the average of personal monthly income in 2024 stands at Rs 35,000 for metros and Rs 32,000 for Tier 1 and 2 cities, showing an increase from Rs 33,000 (metros), Rs 30,000 (Tier 1), and Rs 27,000 (Tier 2) in 2023.

Spending patterns

Household Expenses witness a notable uptick, with an average increase of 6%. In households with more than one earning member, the chief wage earner (CWE) contributes ~80% of the total household expenses, while non-CWE contributes ~20%. In the study, 42% of the women are CWE in their respective households.

For an average lower middle-class Indian, grocery (26%) and rent (21%) are the primary expenses. This is followed by commute (19%), children’s education (15%), medical expenses (7%), electricity bills (6%), cooking gas (4%), and mobile bills (2%).

In terms of discretionary spending, various demographic groups exhibit different spending habits. Chennai stands out for local travel/sightseeing (59%), dining out (54%), and watching movies (55%) compared to other cities. Lucknow spends the least on local travel/sightseeing (17%) and dining out (14%). Chennai also has the highest rent costs (29%), while Kolkata and Jaipur have the lowest (15%). Ahmedabad and Dehradun allocate the least to fitness (1%).

Bengaluru and Kochi spends the most on children’s education (23%). Dehradun tops in medical expenses (13%) but spends the least on children’s education (10%).

Household Savings

In terms of savings, ~60% of consumers prioritise building a cash reserve to address emergency expenses after covering their monthly fixed expenses. According to the study, Men (62%) outpace Women (50%) in savings. Similarly, Gen Z (68%) demonstrates a stronger inclination towards savings than Millennials (62%) and Gen X (53%). Regionally, consumers from the East exhibits higher savings rates (63%) compared to those from the West (61%), South (59%), and North (59%). Furthermore, metros led in savings, with 62% of urban consumers prioritising savings over Tier 1 (61%) and Tier 2 (54%) cities.

UPI usage

On digital transactions, the study shows UPI (Unified Payments Interface) remains a focal point, warranting heightened vigilance and security measures to mitigate the risk of financial fraud. The study indicates that 72% are current users of UPI, with most usage among men, Gen Z, and metro residents. Notably, UPI usage is the highest in Chennai (90%) and lowest in Ahmedabad (58%).

Furthermore, the study shows that 42% of consumers, especially men, Gen Z and Tier 1 consumers, expressed interest towards using Credit on UPI. Interestingly, the reasons to use “Credit on UPI” includes reduced timeframe in taking loans (53%), ease of payments at retail stores (44%), probability of getting better offers (23%), and lesser charges (16%).