CASH strapped Brits are having to scrap their plans for a summer holiday because the cost of package deals has rocketed up to 40 PER CENT.

Prices for the average family break to the Mediterranean have soared by as much as £500 as the credit crunch grips.

Hot spots such as Turkey are worst hit. A seven-day, half board break for two adults and a child to Bodrum has jumped from £1,095 last year to £1,538 in 2009. And a trip to Ibiza is up 25 per cent to £1,400.

Trevor Davis, of independent agent Co-operative Travel, said: "I think the days of cheap holidays are over."

The cost of an average family holiday abroad is nearly 20 per cent higher this year-at £1,742.

Thomas Cook and TUI have withdrawn at least two million package holidays in an industry rocked by the collapse of XL Leisure in September. Last year a family of four could get an all-inclusive two-week break at Disney World, Florida, for £4,887. This year it will set them back £5,519.

Brits who do get away will find their pound doesn't go as far either. Since January 2008 it has fallen 26 per cent against the US dollar and is at a five-year low against the euro. Now £1 gets you just 1.1.

It means a bottle of Heineken in Spain will set you back £2.38, up from £1.96, Coca Cola is 21 per cent more at just under £2. And if you want to buy a bottle of suncream in Miami it will cost you a massive 153 per cent more at £6.68.

Stephen Heath Fair, of Fair FX currency service, said: "I expect people will switch out of the euro countries because they're really expensive places to go now."

Brits are expected to plump for UK breaks instead. Hoseasons Holidays said bookings are up in the past few months.

But there's one place that it's cheaper to go in the financial meltdown-Iceland!

Better off

We're quids in back at home

HARD-UP families will get a little bit of relief in 2009 - thanks to deflation they'll be £40 a week BETTER OFF.

By September, the cost of living will have fallen at the fastest rate since 1993, thanks to tumbling prices of food, goods, petrol, houses and energy bills.

It means broke Brits will finally get some help after being clobbered by the recession and threat of jobs cuts.

Money experts predict the average family will be forking out £130 LESS on their yearly energy bill, a FIVER LESS on a weekly food shop, £16.50 LESS on a tank full for their motor, and £36,115 LESS when buying a house.

After the cost of living rocketed in 2008, analysts believe the UK will slip into deflation in the second half of 2009, when prices will fall rather than rise.

This will mean BAD news for businesses due to a fall in profits, and borrowers, who will see the value of their debt increase in real terms.

But it will give hard-up families and first-time home buyers a break.

Energy bills will fall thanks to the tumbling price of oil and the supermarket price war will help drive down the amount handed over at the tills.

Vicky Redwood, UK economist at Capital Economics, said: "Finally there will be some relief for household wallets in 2009.

"We're already seeing petrol prices fall, but before long we should be getting utility price cuts and seeing even bigger price cuts on the High Street."

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