Yahoo Finance One in three to cancel holidays in 2023, study finds
Recession fears are causing one in three people to cancel their holiday plans in 2023, new research has found.
The latest cost of living tracker from Retail Economics found that recession fears are already taking their toll on household spending plans for 2023.
Almost three-quarters of consumers expect to make changes to their holiday plans next year, citing deteriorating financial positions, with a third likely to completely cancel their holiday plans altogether, according to the Retail Economics-HyperJar Cost of Living Tracker,
Over half of the least affluent households were planning to cancel their 2023 holiday plans, compared to just over 13% of the most affluent households.
Around one-third of consumers are delaying or cancelling major home-related projects next year as housing costs rise, the study of over a thousand UK residents found.
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In an effort to cut bills, almost half are looking to buy devices such as air fryers and heated clothes airers in 2023. So when consumers do spend, they are looking to do so on energy saving devices.
Mat Megens, CEO of HyperJar, said: “Our customers are taking big steps to save the big sums they’ll need to cope with next year’s rising prices.
"Swapping from brands to supermarket own label isn’t cutting the mustard anymore when it comes to building a buffer. It’s a painful but positive move, postponing luxuries rather than risk new or increasing debt.”
Double-digit inflation in the UK is outpacing earnings growth, and this is continuing to diminish spending power and the spare cash availability for most households.
Spare cash available to spend on non-essentials has fallen by around £100 per month for the average household, according to Retail Economics.
Nearly three in five were also found to be worried about their personal finances heading into 2023, and nine in 10 expect to be impacted by the looming UK recession.
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The study found that half said they cannot afford to save more money, and that they believe they’ll be feeling the effects of this economic downturn for an average of 17 months.
Amongst the most economically vulnerable households, the amount of people who cannot afford to save money has risen to 77.1%.
The least affluent remain under the most financial pressure, as they spend a disproportionate amount of income on the essentials driving headline inflation, including food and energy.
The most affluent can offset rising staple costs through earnings growth.
Richard Lim, CEO of Retail Economics, said: “Against the backdrop of rising interest rates, the cost of living crisis has turned from one that affects the most disadvantaged families to one which engulfs the middle classes.
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"Indeed, the rapid rise in interest is a particular concern for those looking at remortgaging over the next 12 months which is likely to impact over 2 million households.
“There’s going to be a period of readjustment. Fear of the unknown will heighten consumers’ anxieties about making big-ticket purchases until clarity over their financial security is established.
"Meanwhile, a softening in house prices will damage confidence, discouraging borrowing while at a time when lenders will also start to raise the requirements bar.”
