Tuesday 7 July 2015
- Two thirds of holiday makers get carried away with holiday spending
- Average UK Adult overspends by £220
- Consumers encouraged to plan for the full cost of their holidays for peace of mind
Research by the Money Advice Service has shed fresh light on consumer’s holiday spending habits. Two thirds (60%) of holiday makers admit to getting carried away when it comes to holiday spending, with the average UK adult spending a total of £220 more than planned each year.
As the UK gets excited about their summer holidays, the Money Advice Service is encouraging consumers to plan ahead and make sure they consider everything they are going to spend to give them peace of mind and make the most out of their holiday money.
Caught out on costs
Unexpected costs contribute to overspending while away, with 60% of holidaymakers saying they get caught out. The most common unexpected costs are:
- Food and drink costing more than expected (32%)
- Activities costing more than expected (22%)
- Having to buy things I forgot to pack (18%)
As well as hefty costs while away, many UK adults spend a small fortune on items simply to prepare themselves for their trip. The average holidaymaker spends £156 in advance of their main holiday each year on items such as clothes, holiday products and beauty treatments. These are important expenses to take account of when planning for a holiday.
The research demonstrated that some Brits are taking a more savvy approach to planning for their holiday. Sixty-eight per cent of respondents said that they save up for either some or all of their holiday. In addition, 58% ensure they have a budget in place for some elements of their holiday.
Even if we owe – we’ll still go
UK adults are also risking financial difficulties by going on holidays they can’t afford. Nearly a quarter of UK adults (24%) have been on a holiday in the past year which they didn’t think they could afford, with 1 in 4 (25%) of these getting into debt to pay for it. The average accumulated debt caused by holidays and travelling is £421**.
The main reasons we go on holidays we can’t afford are:
- Felt I deserved it (35%)
- Felt obligated to go (22%)
- Felt it was my duty to provide a family holiday (20%)
Furthermore, over a third (36%) of UK adults said they have been on holiday while still owing money on a credit or store card, and 39% usually come home with a holiday debt, taking an average of 4.8 months to pay this off.
Head in the sand
One in five (18%) have booked a holiday knowing it will cause them financial difficulty, rising to 37% for those aged between 25-34. Stag and hen dos were identified as a key reason younger people overspend on the cost of holidays, with 28% of 25-34 year olds saying they have been on a hen or stag which they couldn’t afford in the past year.
Responding to the findings, Andy Webb, a money expert at the Money Advice Service, says:
“We all work hard for our holidays and it is great to take time out to relax and enjoy ourselves with friends and family. It is really good to see that so many people are planning ahead and saving for their holidays. Doing this will make sure that you get the most enjoyment out of your break without worrying about how you are going to pay for it. If you are planning a holiday for later this year or next year, I would suggest that you set yourself a realistic budget that takes into account the full cost of your holiday and includes some money for surprise expenses. You can then save regularly to cover the costs.
“We all know that it is easy to get carried away when we are on holiday but you’ll feel better if you’re able to stick to your budget. There are plenty of ways that you can avoid paying over the odds for holiday essentials and still have a great time, for example, buying items or exchanging money before you leave the UK. Even if your holiday is just a few weeks away, it’s not too late to start planning and putting some money aside for those unexpected costs.
“It’s always worth talking through your options with family and friends, who might have lots of good tips to offer. Alternatively, we have lots of information on our website about how to plan ahead for your holiday, so why not take a look before setting out on your travels.”
Andy Webb’s Top Tips for saving for a holiday
Budget – Work out how much everything will cost, including insurance, spending money, car hire and so on. Don’t just look at the brochure price, but consider the full cost of the holiday so you know exactly how much you will need
Set yourself your savings target each month –If you want to go away later this year or next summer, work out how much you would need to save each month in order to afford the break
Save Smartly – Try separating your holiday savings into a separate bank account. This way you can enjoy watching it grow and you will avoid the temptation to dip into it. Your bank account may already allow you to set up a separate savings pot online, but if not, you can open an instant access savings account to save into.
Treat the ‘holiday fund’ like an extra bill each month – Try setting up an automatic online transfer so the money goes into your savings account without you having to do anything
Mark your progress – Keeping track of how much you are saving can be fun. Try breaking your holiday savings target into achievable bite-sized goals so you can track your progress. You could try sticking a chart on the fridge and getting the whole family involved.
Stick to your budget – You can cut costs by purchasing items and currency before you leave the UK and keep a track of spending on food and activities once you are there.
To find out more about money and holidays, visit www.moneyadviceservice.org.uk
NOTES TO EDITORS
1. *Research conducted by Opinium for The Money Advice Service in June 2015 amongst 2,229 UK adults. The survey was conducted online.
2. ** Research for the debt specific stat (£421) was conducted separately by Opinium for The Money Advice Service in June amongst 2,229 UK adults. The survey was conducted online.
3. _*_Specific articles include:
Saving for a holiday
How to get a holiday for less
Get set for summer
Tips for paying for a holiday
Travel money options
About the Money Advice Service The Money Advice Service is an independent organisation. It gives free, unbiased money advice online at moneyadviceservice.org.uk, over the phone on 0300 500 5000, and face-to-face right across the UK. The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.
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