Cost of living: Brits cutting back on holidays and using up savings

·Business Reporter, Yahoo Finance UK
·2-min read
Platja Nova Icarie beach in Barcelona. Holiday spending will decrease as cost of living is on the rise
Cost of living: More than a third (35%) of Brits are planning to cut back on non-essential leisure activities and holiday spending, while nearly a quarter (24%) have already dipped into their savings. Photo: Press Association

A growing number of people are having to change their spending habits and financial decisions amid the ongoing cost of living crisis.

According to a new report from Scottish Widows, more than a third (35%) of Brits are planning to cut back on non-essential leisure activities and holiday spending, while nearly a quarter (24%) have already dipped into their savings.

Some 81% of adults surveyed said they were now concerned about making ends meet thanks to soaring inflation and the rising cost of living, which has seen energy bills, fuel and food costs rise.

In addition to this, three-quarters of people said they needed to take action to cope with the financial pressures.

The survey was carried out across Britain involving more than 5,000 people in May.

Read more: Broadband providers to cut internet prices amid cost of living crisis

Over half (57%) of those surveyed said they were concerned about their finances in retirement, while 50% did not feel they were preparing adequately for later life.

One in nine (11%) of those aged in their 50s reported being worried about having to access their pension savings early to support their short-term financial resilience.

“We are facing a myriad of issues and there are no easy solutions, Pete Glancy, head of policy at Scottish Widows, said.

“It’s sadly understandable that households are being forced to make some tough choices in their budgets, but it’s important they do so whilst taking a longer-term look at their finances.”

He added: “As a guide, we recommend that an individual should look to save a minimum of 12% of their salary to secure a consistent quality of life, but aiming for at least 15% is more likely to provide a comfortable retirement.”

Read more: Heathrow airport told to cut passenger charges

It comes after UK inflation hit 9.1% in the year to May, up from 9% in April.

The current rate is the highest since March 1982, according to the figures from the Office for National Statistics (ONS).

Inflation had already hit a 40-year high when it reached 9% the previous month. The latest figures mean inflation is almost five times higher than the Bank of England's (BoE) target of 2%.

Earlier this month, the BoE warned inflation was on course to reach 11% later this year as gas and electricity prices soar.

Prices rose 0.7% in the month alone, which marks a slowdown from the 2.5% pace recorded in April when the new energy price cap came into effect. Still, the numbers show prices are rising across the economy.

Watch: How does inflation affect interest rates?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting