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£50 Million a Year Blown on Holidays

19-August-2008, Writes Dan Drage dan.drage@consumerchoices.co.uk

Potential savers are blowing their excess money on holidays according to research from Abbey.

Data compiled by Abbey Savings (www.abbey.com) suggests Brits are blowing their hard earned savings on holidays. In fact, over one in four Brits believes the best way to spend excess money is to go on holiday, rather than save.

Brits spend on average an amount equivalent to 10.1 per cent of their net income (around £1,650) going on holiday each year. This equates to £81 billion spent on holidays by the UK's adult population in total.

62% of Britons use their savings to pay for these holidays, meaning a whopping £50.4 billion in savings are raided each year to pay for holidays.

The interest lost from taking out these savings could be as high as £3.2 billion if savers had invested in a high paying savings account.

Additionally, the research showed that while 46% of Britons did not list saving for the future amongst their top three priorities, 33% of Britons felt that going on expensive holidays was one of their top three priorities.

Reza Attar-Zadeh, Director of Savings and Investments at Abbey, had the following to say:

“If people cut back a small proportion of the amount they spent on holidays and kept their savings, this would make a real difference to their financial wellbeing. With savings rates at excellent levels, there has never been a better time to save for the future.”

Chris Eagle, Commercial Manager at Credit Choices, believes the trend for splurging on holidays will be reversed by summer 2009:

“The reality of the credit crunch and high inflation will finally hit home this winter for those who persist in burying their head in the sand. Those of you in debt should try to clear it first before opening a savings account, and those of you who’re debt free would benefit from a robust savings account such as the Icesave (www.icesave.co.uk) Fixed Rate Savings product.”

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