Luxuries still essential despite increasing costs

households in the UK typically spent £5,850 over the last year on “lifestyle essentials” such as holidays, take-aways and haircuts.
By The Newsroom
Published 22nd Oct 2011, 07:00 BST

Despite the rising cost of living, a survey for insurers LV found that Britons still managed to spend £149bn on “luxuries”, an increase of £5.7bn on the previous year.

The research using official data and a survey of 2,000 people found the “lifestyle essentials” had an overall inflation rate of 3.6 per cent in the 12 months to August 2011, more than the increase in nation’s average salaries of 2.9 per cent over the same period.

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More than three quarters – 77 per cent– of those surveyed said they were making financial cutbacks to afford the little treats that they deem important.

Nearly half – 47 per cent – said they bought cheaper food or food that was not well-known brands, while a third each take their lunch to work.

Most money – £3,181 – was spent on holidays and weekend breaks, while TV subscriptions came in seventh at £297.