UK NewsPublished: 13 hours ago
The shadow of a surfer on a beach
Households’ spending on holidays, travel, clothes and gardening increased in May, on top of rising everyday living costs, according to data from a building society.
Nationwide Building Society said more than ?3.7 billion was spent by its members on essentials in May – a 7% increase on April and a 15% rise on May last year.
There are also signs that people are relying on credit cards more to pay for goods and services amid surging living costs.
According to Nationwide’s data, spending on credit cards increased by 6% in May compared with April and was 22% higher than May last year.
By contrast, spending on debit cards remained relatively unchanged in May.
Looking at “nonessential” spending, expenditure on both holidays and airline travel was up by 16% in May compared with April.
The warmer weather and higher prices for goods are also likely to have had an impact on spending on gardening, which was up by 17% compared with April, the Society said.
Spending on clothing and shoes was also up by 12% compared with April as people prepared for summer holidays and socialising.
There was also a 16% increase in spending to pay off existing debt, such as credit cards and personal loans, compared with April, in a sign of people using what spare money they had to reduce the amount they owe.
Mark Nalder, head of payments at Nationwide Building Society, said: “Our data shows that consumer spending has hit a peak this year, driven by both essential and nonessential spending.
“With inflation forcing the prices of goods and services higher, it’s perhaps unsurprising to see the amount people are spending is on the rise, particularly when it comes to food and drink, fuel and energy.
“However, giving the rising cost of living, it’s somewhat surprising to see the number of nonessential transactions and the amount spent rise compared to last month.
“A big part of this is that many households may be looking to enjoy themselves this summer following a difficult couple of years during the pandemic.
“While we expect people to continue balancing their finances in this way, rising inflation and costs may start to impact household finances more acutely in the coming months. This is something we’ll monitor closely.”