LONDON: The cost of living is going up and British families are feeling the pinch but it seems they’re not prepared to cut back when it comes to their holidays, new research suggests.
The latest edition of the Nationwide Spending, a quarterly analysis by the building society of essential and discretionary transactions, suggests that families could be spending up to a quarter of their annual disposable income on going away each year.
The figure is based on the calculation that the average Briton holidays twice a year at a cost of £855 per person, so a family of four could be paying out £3,420 every time they go away together; and if they take two holidays that amounts to £6,840, or 23% of median disposable household income of £27,300.
As it is, almost a quarter (23%) said they had to borrow money for their getaway, with most of them relying on credit cards (15%); rather fewer chose to take out a personal loan (4%) or to tap family and friends (3%).
And of those borrowing money, an overwhelming 88% said this was the only way they could possibly afford their holiday.
Even if they haven’t overstretched themselves to get to their desired location, their money worries aren’t necessarily over: six in ten (61%) admitted to overspending during their time away (women more so than men: 68% vs 55%), while a quarter (25%) regretted spending as much money as they did.
Behaviours that became engrained during a long period of low interest rates are hard to shake, but that may have to change.
Every one of the Spending Report measures showed an increase from the previous year, which means households are spending an average of £80 a month more on essentials, or almost £1,000 a year.
The figures also showed that customers spent on average £57 less on holidays in the first three months of the year compared to the same period in 2017.
Sourced from Nationwide; additional content by WARC staff