However, Nationwide warned 42% were cutting the cost of this year’s break. It found 38% were staying in the UK rather than going abroad, with 28% switching to half-board rather than all-inclusive to save money. Another 26% said they were opting for short-haul over long haul, while 22% were reducing the number of excursions.
Nationwide’s Spending Report is a monthly analysis of nearly 241 million debit card, credit card and Direct Debit transactions. It revealed around £8.84 billion was spent overall in May, up 5% year on year, but said this was partly “a result of rising prices”.
Mark Nalder, Nationwide’s payments strategy and performance director, said: “Despite cost-of-living pressures, many consumers are throwing caution to the wind and still want to enjoy a summer holiday with their family.
“However, there are signs that people are being more cautious over their holiday spending as households opt for UK staycations or short-haul trip rather than long-haul in an effort to keep costs down.”
Total spend on travel in May 2023 reached £127.6 million, up 4% year on year and 4% on the previous month. The number of transactions, 13.7 million, rose 10% year on year and 5% compared with April 2023.
Nationwide’s figures show mortgage payments rising 15% year on year, but other bills down 23% compared with April. Payments on utilities remain 16% higher than in May 2022.
“Inflation continues to push up essential consumer spending, but with sunnier weather and three bank holidays in May, spending on non-essential items still saw a 4% year on year rise,” said Nalder.
Another cause for optimism was Nationwide’s findings on general sentiment. It said the number of people “extremely” or “quite” worried about personal finances and ability to cover essential costs has fallen to 67% – down from the peak of 74% last month.
More than one in six said their finances had improved since the start of the year. Among these, 49% say this was due to pay rises and seeing benefits of cutbacks already made, such as reduced spending on entertainment.
