Three in four people believe summer holidays are a luxury

Three in four people (75%) say that summer holidays are increasingly becoming a luxury that only some can afford, according to research by Compare the Market with over half (56%) of those intending to take a summer holiday this year concerned about the financial cost.

More than one in four (28%) also admitted they felt pressure – including from family and the media – to take a summer holiday even when they could not afford it.

Among those taking a summer holiday this year, many cut back on other costs to afford this. This includes dining out (36%), clothes shopping (33%), social events (28%), big purchases such as a new car or computer (25%), and leisure activities (25%). Others have reduced the amount of money they save (24%), spending on subscriptions (19%), food shopping (17%), haircuts and beauty treatments (15%), and using utilities like energy and water (13%).

More than half of Brits (54%) relied on personal savings to fund their holiday, with others taking on extra work or overtime (21%). Others have used credit cards (20%), received  financial help from family or friends (10%), or  took out loans (5%).

One in three (32%) people planned to spend their summer holiday in the UK this year, while three out of ten (29%) planned a holiday abroad. A smaller proportion planned to take a holiday both abroad and in the UK (17%) or didn’t take a summer holiday at all (17%).

Among those who found summer holidays less affordable this year, many changed their plans due to affordability concerns. Nearly half (47%)  chose a cheaper destination, while almost three in ten (29%) have shortened their trip. Others planned to stay with friends or family to save money (15%) or cancelled their plans altogether (5%).

A variety of factors were identified as making summer holidays less affordable this year, including general cost of living increases (72%), higher travel costs (55%), and increased accommodation prices (44%). Others noted uncertainty about their future finances (28%), a decrease in their household income (22%), higher exchange rates (15%), and having to financially support family members or others (10%).

Compare the Market’s research also revealed notable differences in financial confidence between generations. For example, only one in six (16%) people aged over 55 felt more optimistic about their finances compared to this time last year – relative to over one in three across age groups (36%).

For those with summer holidays planned, less than one in ten (9%) of over 55s said they have found it more affordable than last year, below the general average (32%) and significantly less than 25-34-year-olds (66%). Those aged between 25-34 also spent the most of any age group on their main summer holiday in 2024 – £2,287 compared to £2,005 on average across all ages. 25-34-year-olds were also expected to spend the most this year too – £2,440 versus £1,962 on average across the population.

Sajni Shah, Money Expert at Compare the Market, said “Our latest Household Financial Confidence Tracker highlights the growing financial strain many households are under, with three-quarters of people viewing summer holidays as a luxury only some can afford, a clear reflection of the wider pressures of the rising cost-of-living.

“With many people feeling the financial pinch, comparing household bills, including home insurance, car insurance, and energy or broadband bills can help make meaningful savings.”