Spending on ‘lifestyle essentials’ to increase debt likelihood?

People in the UK could be increasing the likelihood of falling into debt by refusing to give up on ‘lifestyle essentials’, new research has indicated.

The study, carried out by LV= and named the LV= Lifestyle Inflation Index, showed many individuals are continuing to splash out on little luxuries.

It revealed consumers remain wedded to the treats they enjoyed during economic prosperity, despite the country entering an ‘age of austerity’

The investigation showed outlay on such goods reached £143 billion over the past year, which is the equivalent of £5,629 per household and the highest such sum in the last decade.

Furthermore, the study found the cost of these lifestyle essentials grew four per cent in the year leading up to August.

It appears UK adults are most reluctant to miss out on holidays and weekend breaks, as 50 per cent consider it a necessity and £78.8 billion was spent on such getaways in the last year.

Meanwhile, 40 per cent have chosen not to forego eating meals in restaurants, while 24 per cent do not intend to give up on nights out in pubs – which cost the population £18.6 billion and £11.1 billion respectively over the period.

Mark Jones, head of protection at LV=, commented: “The years of plenty have changed people’s expectations of what’s essential in their daily lives and it’s clear that millions are determined not to let the credit crunch cramp their lifestyle.”

The latest MoneyMood Survey from Legal & General revealed many people in Britain are currently less well-off than they were three years ago, with 2.8 million individuals no longer able to save the amount of cash they were 36 months earlier.

By Joe White