Holiday spend increased by 19% year on year in February, while spending on air travel saw the biggest rebound in February – up by 34% year on year. This compares with an overall year on year increase in non-essential spend in February of 9%.
The average was also outstripped by spend on leisure and recreation and eating and drinking in February, both of which were up by 11%.
Moreover, the rate at which spend on holidays grew year on year in February (19%) outpaced growth in transactions (up 17%), suggesting average selling prices have increased. Holiday spend is classified by Nationwide as spending on or with hotels, travel agents, package holidays or cruises.
However, non-essential spending did slow down in February compared with January. Spend on air travel fell by 18% month on month in February to £68.3 million, while on holidays it fell by 5% to £305.4 million.
Essential spend simply on "travel", which includes public transport and taxis, was up 16% year on year in February to £108.9 million. This, though, was also down 1% month on month.
Areas of non-essential spend feeling the pinch in February included dating (down 7%), DIY and home improvement (down 4%) and subscriptions (down 3%) – subscriptions include the likes of Netflix, Amazon Prime, Disney+ and book, magazine and wine subscriptions.
While debit card spending continued to dominate, used for more than half of total spend in February, there was a 7% year on year increase in credit card spend in February to £670 million, although this was down by 6% month on month.
A separate Nationwide poll of 2,000 UK consumers found that close to two-thirds (63%) were or are worried about the current state of their personal finances and their ability to cover essential costs. This figure is down 7% month on month, although nearly four in 10 respondents (38%) said they had used credit cards for areas of essential spend.
Credit ’bridging the gap’
Mark Nalder, payments strategy and performance director at Nationwide Building Society, said: “We’re continuing to see annual growth in consumer spending and, while that can partly be put down to rising costs and inflation, we’re also recording year-on-year growth in the level of transactions made across both essential and non-essential spending.
"This shows that despite rising costs, households are clearly looking to strike the balance between being fiscally responsible and still being able to spend money on themselves. However, our research shows that while the number of people worried about their finances has fallen slightly, there are people relying on credit as a way of bridging the gap for essential bills."
