A 10% slump in Sterling exchange rates means holidays are now £200 more expensive than they were two weeks ago, according to TravelSupermaket.
SalaryFinance, an employee benefits provider, has highlighted how the UK is bingeing on credit just to be able to afford to go on their family getaway. With Brits more likely than ever to be jetting off abroad with over 15 million holidays (a 14% rise from 2011) booked in 2015, the company claims they are piling up an average debt of £421 due to overspending. But given the plummet in Sterling’s value, this average debt could now rise to £621 per person.
According to the company’s findings, just under a quarter of UK adults (24%) have been on a holiday that they thought they couldn’t afford, with one in four (25%) getting into debt to pay for it, while 39% come home with a holiday debt, which takes an average of 4.8 months to pay off. It is estimated in a lifetime, a Brit will splash out £207,824 on holidays (just over the equivalent price of the average house price of £204,000).
Worryingly, this dramatic decline in Sterling’s value follows on from family debt rising in May by its fastest increase in 11 years, with £400 million new credit card debt being accumulated, likely pointing to another credit binge by Brits on holiday spending ahead of the start of the summer, following on from news that households faced the greatest pressure on their finances in nearly two years during the same month.
Asesh Sarkar, co-founder and CEO of SalaryFinance, explained: “Pressure to take their families abroad during the summer months is causing many parents to pay for their trips on credit, often in the form of high-interest bearing loans or credit cards.
“Given the overall downward trend in financial well-being across the country, this overreliance on credit during the summer months is only compounding the UK’s growing debt problem.
“The unintended consequence of funding summer vacations on credit are stark – many people will return to work more preoccupied, stressed and anxious than before as they worry about how they will manage their repayments.”