Debt warning to holidaying Brits
Just under a million Britons taking a summer holiday this year will have to borrow money to fund it, new research reveals.
The average Brit will spend £1,027 on their summer holiday, but a fifth (21%) of those planning a break will borrow money to fund their getaway, according to the Money Advice Service.
It says that while 27 million people will enjoy a break this summer, 8.5 million people cannot afford to take a holiday.
Four fifths (79%) of people who are planning a break said they will use savings to pay for it, the rest said they would have to borrow money in order to afford a vacation.
Other worrying statistics show that 3% of UK adults who are planning a summer holiday will use their overdraft to help fund it, 1% will use a bank loan; 1% will use a payday loan; and 2% will borrow from friends or family.
People in the West Midlands anticipate they will spend the most on their summer holiday at £1,108 per person; while people living in the South West anticipate they will spend the least – £180 less at £927.95 per person.
Jane Symonds of the Money Advice Service, said: "I'm worried so many people feel they can't afford to have a holiday. Going abroad can get pricey and when you add in the cost of doing other activities in the UK the overall cost of summer can rise to a startling amount.
"Before you decide you absolutely can't afford any kind of holiday, get a clear picture of your money across the whole of the summer."
The Money Advice Service has launched a series of calculators designed to help people budget for their summer holiday: moneyadviceservice.org/summer
Money tips for a savvy summer holiday:
1. Set up a holiday fund in which to stash away cash each month – and don't be tempted to spend it on anything other than the holiday
2. Plan ahead. In the run up to your holiday, plan what essentials you need to buy, write a list and set yourself a budget.
3. Get covered. Shop around for the best travel insurance to ensure you'll be able to afford medical care when you're abroad. Check with your bank before you buy, as you may have cover bundled in with your account.
4. Get an EHIC. If you are going to a country within the European Economic Area or Switzerland then you should get a European Health Insurance Card before you travel. Apply free at ehic.org.uk.
5. Shop around for foreign currency – order it ahead, not at the airport as the rate will be high. You can pre-order currency online or get it at your bank.
6. Be travel savvy. If you’re travelling abroad, airport parking charges can add a considerable amount to your holiday costs so consider using public transport to get to the airport - if you buy a train or coach ticket in advance it will most likely be cheaper than a taxi or parking charges at the airport. If you do drive, always plan ahead and shop around for a parking space with the most cost-effective, reputable firm (check online review sites for recommendations).
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.