Brits cut back on posh coffees to afford their holidays
This comes despite the Office for National Statistics reporting a drop in the Consumer Price Index (CPI) from 2.5% to 2.2% in September.
The top ten ‘essentials’ include holidays, meals out, TV subscriptions and trips to the salon. However, the luxury shop-bought daily coffee has fallen out of the top ten for the first time.
The average annual spend on ‘lifestyle essentials’ is £6,194 per household, which was £5,850 in 2011.
The UK as a whole has spent £9bn more than last year on these items, despite almost one in five people suffering a pay freeze during in this period.
Mark Jones, LV= head of protection, said: “The need to get away from it all is important to people when economic times are hard, which explains why holidays and weekend breaks remain the lifestyle aspect that most people are most unwilling to do without.
“It is no surprise that people are trying to ‘keep calm and carry on’, and making cutbacks in other areas to maintain the little luxuries in their life.”
The report found the ‘essentials’ have an overall inflation rate of 3.2% to August 2012, significantly more than the increase in the nation’s pay packets over the same period (1.5%).
However, the report did highlight that not all luxuries had increased in price, with the average night out at 2.5% from 6.6% in 2011 and takeaway meals increasing by 2.1% compared to 5.6%.
In order to be able to afford holidays and nights out, Brits are cutting back on other aspects of their daily life.
The most common cutback is buying cheaper or own brand basic food (48%).
One third stated they have switched to buying clothes and other personal items at cheaper shops than they may have in the past, and one in five (20%) say they are buying clothes and other personal items second hand, or growing their own fruit and veg (16%).
Mark Jones added: “It is clear that these lifestyle luxuries are central to many people’s happiness. However, people need to consider how they would continue to pay for the real essentials should their financial circumstances change.
“Over eight in ten (83%) working adults said they do not have any protection in place to cover their income should they be unable to work due to accident or illness, leaving many at risk of not only missing out on their ‘essential luxuries’, but being unable to cover the real day to day essentials, such as their mortgage, food and energy bills.
“People should seek professional advice about the best way of financially protecting themselves and their family”