Brits continue to prioritise eating out and holidays alongside saving for the future
Adventure was back on the menu this summer, as new insight from Virgin Money shows Brits are carefully balancing their finances so they can have fun and enjoy experiences while also saving for the future, despite the ongoing cost-of-living pressures.
The new analysis of Virgin Money current account data1 shows customers have spent considerably more on eating out and holidays between June and August 2023 compared to the same time last year.
Overall, Virgin Money customers spent a total of £940.6m across lifestyle categories in summer 2023, 11% higher than in summer 2022. Lifestyle categories include holidays, UK stays, eating out, style, wellbeing, keeping fit, memberships and subscriptions, and entertainment. The number of transactions is also up by 6% year on year, indicating consumer confidence is building.
When it comes to discretionary spending by customers over the summer, spend on eating out takes the top spot, with a total of £295.8m (up 11% on summer 2022), showing that people were making the most of long summer evenings with friends and family. Additional survey data2 of Brits from Virgin Money shows that for those people who spent more on eating out this summer, the main reasons were because they were keen to make the most of the season (36%), were enjoying meals out while on holiday in the UK (36%) and had more social plans over the summer that involved eating out (33%).
Holiday spend increased by a third (33%) year on year, reaching a total of £129.5m between June and August 2023. A quarter of those who spent more on going abroad (26%) said holidays are the most important thing they spend money on, and they’d rather make memories with friends and family than miss out.
Unsurprisingly, they admit the most common reason is because the cost has risen since last year (37%), however, this clearly isn’t enough to put people off booking a holiday entirely. In fact, one in 10 (14%) of them admit that they’ve cut back on other areas of spending so that they could afford to fork out more on travelling, highlighting the importance of time away with loved ones.
Looking at quarterly spend trends – summer (June-August 2023) compared to spring spend (March-May 2023) – eating out continues to take the lead here too, with customers spending 6.3% (£17.4m) more in summer than in spring. Spend on UK staycations increased by 10% (£5.3m) this summer compared to spring, as people holidayed on home soil during the summer months, despite the mixed conditions of being the eighth warmest and potentially sixth wettest summer on record3.
Spending on style remains important for Brits, with a third of those who spent more on clothes, shoes and accessories (32%) in summer vs spring revealing they have been treating themselves for summer holidays. While total spending on style increased by only 4% quarter on quarter, the number of transactions increased by 8% from spring, suggesting that people are opting for cheaper items to help make their money go further.
Although people are spending more on lifestyle spend than both in spring and this time last year, the new data2 also uncovers some promising savings trends, showing that people are focused on managing their financial situation and planning for the future. The results find over half (59%) of people managed to save more or the same this summer than in spring, and just 10% say they don’t feel in control of their money. Brits are building healthy relationships with money, with over half (53%) prioritising saving over spending (compared to just 17% who prioritise spending over saving), showing they are budgeting for their future while also enjoying themselves throughout the year.
Ruth Brougham, Head of Digital Banking at Virgin Money, said "We’ve seen our customers choosing to prioritise their lifestyle spending to allow them to be more adventurous and enjoy exciting experiences over the past few months. Despite the cost of living pressure, it’s reassuring to see that making memories continues to be important for people, and saving for a rainy day remains a high priority for many.
“That's not to say we don't understand times are still tough for many. We’ve all felt the effects of inflation on what we buy and we're keen to listen to our customers and understand how they are choosing to spend their money, especially outside of their monthly bills and commitments. Doing this means we can understand their needs better and help them stay on top of their finances. From support with balancing their budgets so they can enjoy the little things, to help with saving for a big break away with friends and family, we're on hand to provide people with the tools, help and products they need to make the most of their money and have fun at the same time."
The Virgin Money mobile banking app is packed full of clever tools to help customers budget, top up savings and track their transactions to help people feel in control of their money, and Virgin Money also offers a wide range of savings products to help customers make their money work for them. View Virgin Money’s savings range here.
About the research
- Customer spend data sourced from Virgin Money current account customers who have actively spent in one or more of the lifestyle categories between June and August 2023. Lifestyle categories include eating out, holidays, style, wellbeing, entertainment, keeping fit, staying away, and memberships and subscriptions.
- Survey carried out by OnePoll with 2,000 UK adults between 13th-21st September 2023.
- Met Office data www.metoffice.gov.uk