Thousands borrowing money to pay for holidays

Thousands of people in the UK are borrowing money to pay for holidays they cannot otherwise afford, according to new research from the Money Advice Service.

More than half of individuals (54 per cent) will be going on vacation this summer, while just under a third (31 per cent) have no plans to do so.

Of the latter, 56 per cent said cost is the biggest factor preventing them from going away.

Holidays are becoming increasingly expensive and it is forcing many to go into debt in order to pay for one.

While 79 per cent of people taking a trip this summer will fund it with their savings, an estimated 800,000 individuals will borrow money.

What is worrying about this situation is the methods of borrowing people are set to turn to. While some will use their family or friends to obtain the funds, some are going to a bank and even a payday loan company, which can be very dangerous in the long-term should the deficit not be paid off.

Three per cent of UK adults planning a summer holiday will use their overdraft, while one per cent will take out a bank loan and a similar number will use a payday loan company.

According to the research, the average amount required per person is £1,027 in order to pay for this summer's excursion, including trips abroad and at home. Collectively this equates to £27 billion across the entire UK adult population.

Interestingly, it is the older generation who plan to spend the most on their summer vacation. Those aged over 55 expect to fork out an average of £1,110 per person, while those aged between 18 and 24 anticipate an average spend of £641.

Naturally, it is more difficult for families to afford a holiday as they can often only go away when their children are off school.

Adults in one-child households anticipate they will spend £952.72 per person, while those in two-child households expect to spend £284 more than that.

Jane Symonds, head of service delivery at the Money Advice Service, said: "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."

Ms Symonds said thinking ahead is crucial to affording a holiday and people should start to put some money away months in advance in order to have the funds available when looking to reserve one.

Planning your booking in advance is also a good method of reducing expenditure, as deals can often change. Keeping an eye on deals offered by travel agents can result in large savings.

While taking a holiday is important, it is equally as imperative to have the money to pay for it. Borrowing funds should be done as a last resort as the interest charges can exacerbate the overall price of the holiday.

By James Francis