For a lot of people on 'middle' incomes it is very much about priorities. By middle, I mean people with a reasonable amount of disposable income but not enough to buy anything they could ever want without thinking about it. There will be millions of people in UK in this sort of situation. Most of those could have a £500 pm holiday budget, if that's what they prioritised.
Some people spend hundreds of pounds a month on cars.
Some people have pets which can easily cost £100+ when you consider food, vets bills, insurance, grooming, beds, sitters for holidays etc.
Some people spend £100+ pm on grooming like waxing, hair appointments, makeup, nails, lotions and potions, etc etc.
Some people have coffee and lunch out of the house every day, this can easily cost £200 per person per month.
Some people get new mobile phones regularly and pay £50+ pm per person.
Some people go out for meals and drinks several times a month and spend £50+ a time.
Some people buy a larger or more expensive house than they strictly need and spend a lot of money decorating and funishing it.
Some people's idea of basic grocery shopping is £200 pw of organic everything from Waitrose.
Some people like to spend as little money as possible and save lots and lots of money.
Some people smoke, literally setting fire to hundreds of pounds a month.
Every single one of those examples above have significant scope to cut down and free up money for a £500 pm holiday budget if that's what you prefer. Very few people can afford all the things above but millions of people have plenty of money, without a six figure income, to do some of them, depending on what matters to them.