The gap between the daily budget planned by British holidaymakers abroad and the money they end up spending is at its highest level in 10 years.

Britons travelling overseas this year have been caught out by the impact of inflation with popular purchases, such as ice creams and drinks, much more expensive than expected, according to holiday spending research by the Post Office.

On their most recent holiday, three-quarters of holidaymakers surveyed in the research set a budget averaging £334 per person. But only one-third stuck to it, with the rest paying an extra £155 per person.

Families overspent to an even greater extent, splurging £312 above the average budget of £566.

The Post Office said: “Family overspending levels have almost doubled since before the Covid-19 pandemic."

More than half (57 percent) of holidaymakers blamed the cost of eating out at a restaurant for busting the budget, while nearly one-third cited the high cost of food and drink in supermarkets.

Laura Plunkett, head of travel money at the Post Office, said the evidence suggested “most people set inadequate budgets and end up overspending as a result”.

She recommended people look back to their last holiday and set their next budget starting from that basis.

During the cost of living crisis, many holidaymakers have opted for all-inclusive packages, which offer food and drink within the headline price.

However, some resort hotels have slimmed down what they include in these packages in terms of food a drink.

As a result, the study found the proportion of people paying extra for meals and drinks on an all-in deal had quadrupled to 57 percent over the past decade.

The report also questioned travellers on which of 28 destinations they found to be the best value for money on their previous trip. Topping the list among respondents was Greece, followed by Spain and Portugal.

The report also sought the opinions of those who had never visited these destinations, producing a notable disparity in views.

Laura Plunkett said: “The opinions of holidaymakers who have visited a destination are really useful and likely to be a more reliable source of information about value for money than those expressed by people who have no direct knowledge of the country.

"Most of the 28 destinations included in our good value poll achieved higher scores from past visitors than among those who had to rely on what they had read or heard about the country."