Insolvency Expert Comments On Summer Trends

Nearly one in four (38%) of the British public is trying (or will try) to spend less on their holiday this year. Of those saving money, 59% are choosing to holiday at home instead of abroad, according to a recent poll by R3, the insolvency trade body.

While of those who have decided to venture to foreign waters, 71% are choosing less expensive accommodation, 66% are choosing a cheaper travel option and 60% are spending less money on eating out and activities once on holiday.

Andrew Walker, chair of R3 in Yorkshire and partner at Irwin Mitchell, comments: “It’s unsurprising that people are choosing to stay at home instead of holidaying abroad to cut down on their expenditure, given that we have seen consumers’ disposable income become squeezed as a result of inflationary pressures.

“Consumers who are cutting back are already having a significant impact on the economy, as the latest drop in retail sales revealed. The nation deciding to stay at home might provide the much needed boost to the UK economy, particularly in tourist areas and coastal towns where insolvency levels rocketed during the recession.” 

R3’s research found nearly a third (30%) of Britons have chosen not to go on holiday at all, an increase from one in four (25%) people this time last year.

Mr Walker added: “People choosing not to have a holiday this year is likely to have grown out of necessity rather than choice. Many UK households will either simply not have the money to go on holiday as a result of cuts to their disposable income or have decided to save their money in preparation for the difficult times ahead. R3’s latest personal debt snapshot revealed only a quarter (25%) of consumers believe their financial situation will improve over the next six months.

“The money saved from spending less or not having a holiday at all will provide individuals with a financial ‘buffer’ in case they fall on hard times.”

R3’s holiday poll also revealed that of those having a holiday this year, 1.8 million people (5%) will be borrowing to pay for it. They will on average borrow £1,581, an increase from £1,130 last year. This will take an average of nine months to repay, compared to an average of seven months last year. Of those going on holiday, the younger you are, the more likely you are to borrow money to pay for your holiday, with one in ten (10%) 16- 24 year olds borrowing money to pay for a holiday.

Mr Walker continues: “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 financially distressed individuals whose debts include loans.”