The UK’s spend on holidays and travel continued to grow last month – and at a faster rate than other sectors, reports Travel Weekly.
Nationwide Building Society’s Spending Report cited rising prices as well as increasing transactions as responsible for pushing up household expenditure early this year. Food prices are up 18% and the Food Foundation has found an extraordinary almost 20% of people have skipped a meal or cut back on food in order to stay within their household budget.
Consumer research suggests Brits are also responding by putting essential items on their credit cards. It might seem surprising then that spending in categories deemed ‘non-essential’ is up nine per cent on 2022 overall. The finding tallies with Tripadvisor data released last year, showing that Brits were prepared to keep spending on travel, despite the squeeze on wallets.
Our research shows that while the number of people worried about their finances has fallen slightly, there are people relying on credit as a way of bridging the gap for essential bills.Mark Nalder, Nationwide’s Payments, Strategy and Performance Director
Perhaps predictably as society comes out of Covid hibernation, priorities are different. Spending on holidays rose 19%, with 34% more spent on air travel than in February 2022.
Hospitality is also a winner, with Brits spending 11% more on eating and drinking ‘out out’, as they say. Conversely, home entertainment took a hit, with subscription streaming services like Netflix, Amazon Prime and magazines, down 3% year-on-year.
Nationwide analysed about over 200 million transactions by debit card, credit card and Direct Debit. They found that credit cards are not only being used for treats like eating and drinking out (14%) and holidays and travel (11%), but are also being used for weekly and daily supermarket transactions (29%), fuel/electric car charging (13%), as well as utility costs (12%).
Nationwide’s Payments, Strategy and Performance Director, Mark Nalder said: “We’re continuing to see annual growth in consumer spending and, while that can partly be put down to rising costs and inflation, we’re also recording year-on-year growth in the level of transactions made across both essential and non-essential spending.
In a separate survey of 2,000 people, Nationwide found that personal finances and basic solvency were a cause for alarm to almost two thirds (63%) of Brits. This seems like a high figure but is in fact an improvement on last month when 70% of those in the UK were concerned about their budgets and their ability to pay bills.