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More than 70% of consumers began 2016 feeling optimistic about their household finances and more than one in six plan a “major holiday or overseas trip” this year, according to a survey by Barclaycard.
The study of 2,000 UK consumers found one in three (34%) planning a “major purchase [of] the type that only comes up every few years or so” in 2016.
Of these, 52% expect to buy “a major holiday or overseas trip” ahead of other expensive items such as new furniture or a new car.
The survey, published today, found 71% of respondents optimistic about their finances and 58% confident in their ability to spend more on non-essential items this year, leading Barclaycard to predict “uplifts in spending for the retail and leisure sectors”.
One in six of those who plan to up their spending in 2016 will do so because they feel better off now than they have before and 13% say that after ‘austerity fatigue’, it’s time to treat themselves and their family.
Barclaycard data for the final quarter of 2015 showed consumer spending growth continued to rise, with overall spend up 3.5% year-on-year.
Online shopping in particular reported its strongest-ever quarterly growth, at 16% while travel a rise of 7%.
However, an ingrained search for value is a motivator for a fifth of shoppers, as they plan to spend more simply to take advantage of great deals, according to the study.
Households across the UK are currently benefitting from benign prevailing economic conditions with annual inflation remaining close to zero since the start of 2015 and employment up to 74%, the highest since records began in 1971.
But it remains to be seen whether the most recent downbeat economic news will have a negative impact on consumer confidence.
Barclaycard chief operating officer, Chris Wood, said: “Consumers are starting the year with higher levels of confidence, thanks to lower fuel costs and interest rates, rising employment and real wage growth. As a result, they’re appearing more willing to make those bigger purchases that only come up every few years.
“These increased levels of confidence should be an encouraging signal for retailers, especially those selling holidays, cars and household goods.
“Spending on non-essential items, resulting in a further boost to the UK economy, looks set to continue as households plan to spend more on treating themselves and their families, thanks to months of careful budgeting and falling prices on essentials.
“But it will be interesting to see whether rising concerns over the global economy impact these plans, causing consumers to draw breath and slowing the pace of spending growth as we move forward into 2016.”