Following this week's announcement that UK inflation has hit 5.2%, protection specialist LV='s 'Lifestyle Inflation Index' published today reveals Brits have spent £149 billion - an average of £5,850 per household - in the last year on what they deem to be their 'lifestyle essentials'.
These include items such as holidays, nights out and take away meals - the same 'essentials' which cost £5.7 billion more than last year.
The research found these 'lifestyle essentials' have an overall inflation rate of 3.6 percent in the year to August 2011, more than the increase in the nation's pay packets (2.9 percent) over the last 12 months.
Despite a 4.5 percent inflation rate already hitting British pockets hard this year, and this week inflation announced as hitting 5.2 percent, LV= has found the inflationary rate of some 'lifestyle essentials' has raced ahead, with nights out in pubs and bars at 6.6 percent, take away meals at 5.6 percent and trips to the cinema at 5.2 percent.
Since 2000, household spending on top ten lifestyle items has increased by 46 percent, from £4,010 to £5,850 per year.
Of Brits' top lifestyle essentials, households spent the greatest sum on weekend breaks and holidays over the last year, at nearly £82 billion (up £2.6 billion from last year) - or £3,200 per household. Meanwhile meals out accounted for over £19 billion of household spending and takeaways/delivery meals exceeded £12 billion.
Britain's most loved lifestyle essentials and what they're costing us
1. Holidays / weekend breaks - £81.5 billion
2. Meals out in restaurants - £19.4 billion
3. Cultural events (theatre, arts etc) - £2.6 billion
= 4. Nights out in pubs / bars - £11.6 billion
= 4. Trips to the cinema - £0.8 billion
= 6. Take away / delivery meals - £12.1 billion
= 6. Haircuts / styling by professionals - £4.3 billion
= 8. TV subscriptions - £7.8 billion
= 8. Premium foods at home - £7.0 billion
10. Daily coffee or tea from a shop - £1.9 billion
When asked what aspects of their lifestyles they would not be willing to cut back on if they were to have a drop in income, 20 percent said they would not want to do without holidays and 12 percent wouldn't trim their budget for haircuts. Dining out in restaurants and TV subscriptions take joint third place.
However, overall three quarters of people are making financial cutbacks in order to afford the things which they say are important to their lifestyle; almost half are buying cheaper or no brand food, 36 percent are buying clothes in cheaper shops and 33 percent say they are taking their own lunch to work.
Mark Jones, LV= Head of Protection, said: "The nation is clearly reluctant to give up what they class as 'lifestyle essentials'. And the increasing cost of these items and services is putting people under pressure financially. The need to 'get away from it all' is important to people when economic times are hard, which explains why holidays and breaks remain the lifestyle aspect that most people are unwilling to do without.
"People's lifestyles are, rightly so, very important to them to maintain, despite the economic conditions. And people should be encouraged to consider how they will continue to pay for the real essentials as well as some of the little luxuries should their financial circumstances change."