The majority of UK households are feeling financially secure, with 70% of people confident enough to plan a summer holiday, according to a survey.
The number of people feeling financially secure has risen this quarter by three percentage points to 58%, while confidence that the UK economy is improving has risen to 17% from one in 10 three months ago, the KPMG Consumer Pulse poll found.
The survey of 3,000 UK adults, taken in early June, found 50% feel able to spend freely, although 14% say they are still having to actively cut their discretionary spending to pay for essentials, and 3% of are incurring debt to do so.
Reflecting on their spending during the last three months compared to the previous quarter, consumers most commonly said they had spent less on eating out.
Around a quarter (23%) said they had bought more promotional or discounted items when shopping, while just over a fifth (22%) said they used their loyalty cards more.
Of the 70% who are planning a holiday, 34% say it will be in the UK, 21% are heading abroad and 15% are doing both.
However 75% of those going on holiday are taking steps to reduce the cost of travel, such as going for fewer nights, self-catering or using a lower-cost airline.
Some 33% say they will be taking children on holiday during term-time to cut costs, while one in five (20%) said their whole holiday would be taken during term-time.
Despite the quarterly improvement in economic confidence, half of people (51%) feel that the economy is still worsening – although this is down from 58% in the previous quarter.
Those saying that the economy is getting worse cite the cost of their groceries (79%), utilities (74%), and the general state of public services where they live (42%).
Linda Ellett, head of consumer, retail and leisure at KPMG UK, said: “Consumer confidence has rallied over the last quarter and only a fifth of consumers now feel insecure about their financial circumstance.
“Businesses will be hoping that this improvement brings about increased spending confidence during the summer months.
“But macroeconomic confidence still looms large, with half of consumers still to be convinced that the economy isn’t worsening.”
Ms Ellett added: “Summer holiday demand looks very healthy, bringing direct and indirect benefit to the UK retail and leisure sectors.
“Many households have prioritised discretionary spend for their holiday but, considering both household essential costs and the price of travel have increased, it is little surprise to see three quarters of holidaymakers are still taking a variety of steps to get the cost of their break down where they can.”
