Holiday Makers Keen to Increase Their Debt

More than 2 million people in the UK this summer have loaded themselves in debt for the sake of a holiday as personal insolvency continues to hit record highs.

New research has shown that these people are borrowing an average of over £1000 to be paid back over a seven month period.  Scottish holiday makers have been shown to be the worst culprits, 12% said that they either had or were planning to borrow money in order to go on holiday this year.  Closely following them was Londoners with 10%.

The research, done by insolvency trade body R3 showed that the least likely to borrow money for holidays were people in the North West, Yorkshire, Humberside and the West Midlands, just 3% of people in these areas intended to borrow the necessary funds.

Frances Coulson, R3 vice-president, said: “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 is worrying, especially as these are still economically uncertain times.

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

Currently, more than 70 people per hour in the UK are falling into some form of personal insolvency proceedings with figures indicating that personal insolvency is now at its worst level since records began 50 years ago, figures saw a 17.9% hike for the first quarter this year compared with last.

New insolvency figures will be published over the next few days.

R3 have revealed that 2,329,500 people had borrowed or were intending to borrow money for their holiday at an average of £1,130 each.

Another revelation shown is the generational split in attitude towards borrowing.  16 to 24 year olds were shown to be the most likely to, whilst over 65s were the least likely.  These figures may be slightly distorted however, as the average over 65 will have more spare cash than someone in the 16 to 24 bracket.

Ms Coulson added: “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 to avoid a life dogged by financial problems.”

Posted at 03:52PM Aug 02, 2010 by Marc Stenton in Insolvency  |  Comments[0]