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The deep cost of fun in the sun

MORE than 2.3 million people across the UK are borrowing an average of over £1,100 to pay for their holiday this year, and will spend seven months paying the money back, according to a study from insolvency trade body R3.

The R3 research looks at how the economic downturn is affecting holidaymakers’ habits, and found that Scottish holidaymakers are the most likely to borrow money to pay for their holiday, with twelve percent saying that they either had borrowed or intend to borrow money to cover the cost of a holiday in 2010.

Londoners are not far behind, with ten percent saying that the cost of their holiday would be covered by borrowing, whilst people in the North West, Yorkshire & Humberside and the West Midlands are the least likely to borrow to cover the cost of their holiday with just three percent saying they will.

Linda Farish, chairman of the north east arm of R3 and director of Recovery & Insolvency at Newcastle-based accountants RMT, says: “It’s worrying that people are prepared to take on a substantial amount of debt for such a long period of time in order to afford a holiday, especially as these are still economically uncertain times.

“Personal insolvency hit record levels in the first quarter of this year and look set to rise so we’re urging people not to spend more than they earn.”

The R3 research also highlights a generational split, with holidaymakers aged between 16 and 24 years old being the most likely to borrow, whilst those aged 65 and over were the least likely.

Linda Farish adds: “The figures points to a clear generational split in attitudes to borrowing and debt. We must continue to promote the idea that saving, rather than borrowing, to pay for luxuries is the best way for to avoid a life dogged by financial problems.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .