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Holidays 'Getting Britons Into Debt'

Aug 18, 2007
Millions of Britons are incurring debt problems as a result of going on holiday, new figures reveal.

According to MoneyExpert, 1.4 million consumers are still paying back money owed from going away last summer. Despite 3.8 months reported to be the average amount of time it takes for Britons to complete repayments on borrowing to fund their holiday, some 926,000 of those surveyed claimed that it took them at least a year to clear off their debts. Meanwhile, six per cent of those surveyed (about 2.3 million) take less than a month to make up for money owed on their holiday, with two months reported to be the average amount of time required for two per cent of consumers.

Sean Gardner, chief executive for MoneyExpert, said: "Holidays are a time for getting away from it all, but too many of us are just getting into debt and building up troubles for the future. With borrowing costs rising across the board there is real concern that too many people are trapped in a spiral of debt which ultimately threatens to overwhelm them. We all deserve a holiday but running up debt is not going to help in the long-run".

However with the price comparison website claiming that the effect of five Bank of England interest rate rises over the last year is set to increase pressure on Britons' day-to-day finances, Mr Gardner warned that "borrowers need a strategy to control their debts". He added that those with difficulties handling their money should create a plan to reduce their monthly expenditure. "That should include switching debts to more competitive credit cards and consolidating debts into a personal loan. In some cases it could include taking out a secured loan if you are a homeowner", he suggested.

Meanwhile, middle-aged consumers are said to be the most likely to still be paying off money owed from last year's summer break. Some six per cent of those in the 45 to 54 age bracket are currently making repayments accrued from 2006, in comparison to a national average of three per cent.

In May, figures released by CreditExpert indicated that just over a quarter (27 per cent) of British holidaymakers choose to fund their trip away by borrowing money through credit cards, personal loans or an overdraft. Despite the financial services firm suggesting that the effect of interest rates rises and higher living costs are evermore curbing consumers' finances, 18 per cent of those who incur debts by going abroad claim that the trip is so important to them that they tend to think about how they will afford to go away later. Meanwhile, one out of six (15 per cent) respondents are said to submit to peer pressure and go away just to avoid disappointing their loved ones.

Figures released from the firm also suggested that 22 per cent of tourists who go into debt lose track of their day-to-day spending while abroad, with 18 per cent said to consider the results of this after returning home. The study showed that those aged 25 to 34 are the most likely to lose track of their finances during a holiday, with 37 per cent of people in this age group claiming it is the main source of their subsequent debt problems.
About the Author
Steve Smith writes for 1 Stop Finance Shop, a one stop, Personal Loans Shop, with information on bad credit loans and debt consolidation loans available on site.
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