Families are cutting back on holidays this year as the cost of living squeezes budgets, with almost half of those going away saying it took them six months to save for the trip. Three quarters of holidaymakers have made compromises, either staying in the UK or shortening their break, according to MoneySuperMarket's latest Household Money Index.
The index found that 64% of people are planning more days out closer to home, while one in 10 are using rewards schemes and deals to reduce the cost of their holiday.
Struggles of a typical family
Mum-of-two Kelly Miles, 33, from Portsmouth, who lives with partner Cameron, 32, and children Jensen, 11, and Lilah, nine, said she managed to afford a week in Turkey but is worried about paying for activities. "I think it's often forgotten about how expensive summer is. I save all year round for our summer holiday, but I am guilty of putting saving for the rest of my summer on the back burner and then left wondering where I'm going to pull all this money from," she said.
Rising costs and shrinking disposable income
Disposable income for a typical UK bill payer has fallen by £56.37 a month since April, leaving people with 7% less after bills. 78% expect grocery costs to rise, and 73% anticipate higher energy prices in the coming months. More than half worry about petrol costs, while 39% are preparing for childcare and school costs to increase over the next year. 17% now say getting to the end of the month without using their overdraft feels "unachievable".
The MoneySuperMarket Household Money Index tracks spending across 31 everyday bills. The latest report shows the average person spends 66% of their income on these bills, up from 65% in April, leaving £745.96 at the end of each month.
Expert advice
Kara Gammell, Personal Finance Expert at MoneySuperMarket, said: "The latest MoneySuperMarket Household Money Index shows that, while households are making some savings, many have less money left after paying their bills than they did in the last quarter. With people expecting essential costs, such as groceries, energy and fuel, to keep rising this year, many are taking practical steps - from building up savings to reviewing their regular outgoings - to stay in control of their finances."
She added: "While many households are focused on cutting costs now, some are thinking longer-term and exploring ways to build financial resilience through savings and investments when they're able to."
