Nationwide’s spending report revealed that overall essential spending is up 5% year-on-year. Transactions also increased by 7% from April to May.

The gap between essential and non-essential spending appears to be closing, as people are more comfortable spending on relatively luxury items for themselves.

Nationwide also said that non-essential spending has increased annually for every month this year.

Digital puchases were the main driver for non-essential goods with a 28% rise in the year to May, as consumers increased their outlays on home entertainment.

There was also a 25% growth in airline travel spending with transactions made to airlines rising by a considerable 41% as more people looked to have a holiday overseas this summer.

While essential spending was spearheaded by mortgage rates and rents rising by 15% and 18% respectively in the 12 months to May.

Outgoings on utility bills also increased by 16%, with supermarket spending rising by 13% as food and drink inflation has remained stubbornly high.

There was also a 9% rise in supermarket transactions in the year to May as many want to take advantage of the summer weather with extras such as barbeques.

Fewer worried about their personal finances

The number of people who are worried about their ability to cover essential costs has fallen to 67% in May compared to 74% the previous month. More than one in six said their finances have improved since the beginning of this year.

Just under half of the respondents to the survey revealed this is due to pay rises and cutting back on spending on items such as on entertainments.

According to Nationwide’s poll of more than 2,000 people, while cost-of-living pressures still exist, spending on luxuries is seen as an essential part of summer.

Summer spending on the rise

The top choices that consumers are prepared to spend more money on are holidays, day trips, eating out and visits to the pub.

The survey found that people are willing to spend  £1,491 on a holiday

This includes everything from flights to accommodation, spending money, eating and drinking and excursions.

However, many are also opting for more economical staycations, as one-in-four said that they would remain in the UK rather than travel abroad.

Mark Nalder, payments strategy & performance director at Nationwide Building Society, said: “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 four per cent year on year rise.

“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 trips rather than long haul in an effort to keep costs down.

“The school summer holidays can be a very expensive time for families as spending on childcare, food and drink and ways to entertain the children continue to mount up, so it is likely we will continue to see non-essential spending rise in the weeks and months ahead.”