Those taking out loans to pay for holidays could find themselves facing deep financial debt problems that could even lead to insolvency through bankru…
Those taking out loans to pay for holidays could find themselves facing deep financial debt problems that could even lead to insolvency through bankruptcy or an individual voluntary arrangement.
Such situations are arising in many cases, according to research by insolvency professionals' body R3, which has found 1.8 million people have borrowed to fund this year's trip, with 18 to 24-year-olds twice as likely as the average holidaymaker to fund their getaway in this fashion.
Chief executive of the organisation Frances Coulson said: "For those who have borrowed to pay for their holiday they should be aware of the high interest rates that may be charged.
"R3 members have seen an increase in the number of financial distressed individuals whose debts include loans."
The study revealed 30 per cent of Britons are not taking a simmer holiday this year because of their financial problems, compared with 25 per cent in 2010.
And 38 per cent have been trying to save money on their trips, with over half of these staying in Britain rather than going abroad.
R3 noted one benefit that does come from this is that holiday money stays in the UK economy and benefits British resorts.
Meanwhile, those who are going abroad are also saving on costs, with 71 per cent staying in less expensive accommodation and 66 per cent finding a cheaper way to travel.
The expense of foreign holidays is greater in the school holidays, according to a recent Santander survey.
It found that visits to overseas resorts cost up to 92 per cent more in August than in September.
By James Francis