Press release:

Brits overspend by nearly £500 on their summer holidays

• Three fifths (59%) of Brits[1] went over their holiday budget by an average of £500 this summer[2]
• Nearly half (45%) blamed the poor exchange rate for the additional spending[3]
• A third (34%) of those incurring extra costs relied on their credit cards to pay for the added expense, while one in ten (11%) turned to their overdraft[4]
• Holiday overspending has taken its toll, with nearly half (46%) in a worse financial situation than before their holidays[5]
• Those who overspent on holiday say it will take an average of four and a half months to clear the debt[6].

British holidaymakers are blaming poor Sterling exchange rates against the Dollar and Euro for blowing their summer holiday budget, with nearly three fifths (59%) sinking into debt[1] after forking out an extra £491.78[2]. That’s according to research from uSwitch.com, the price comparison site and switching service.

Of those spending more than they budgeted for, nearly half (45%) said the plunging pound had made everyday items pricier on holiday[3], and a quarter said their final accommodation bill was more than expected[7].

This increased expenditure has led to many holidaymakers slipping into debt to cover the costs, with a third (34%) using credit cards and one in ten (11%) dipping into their overdraft[4]. Others chose to curb their spending on luxuries – putting a dampener on their week in the sun – with nearly a fifth (19%) dining out less, and another one in five (19%) buying fewer gifts for friends and family[8].

Extra holiday debt has squeezed budgets hard, with nearly half (46%) saying they are now in a worse financial situation than before their holiday[5]. Of this group, many are being forced into action to manage their debts post-holiday, with two in five (41%) taking out another credit card[9] and almost a third (30%) resorting to a payday loan to help make ends meet[10]. Others are making lifestyle changes to pay off debts – a quarter (27%) are taking on extra work shifts[11], while 26% expect to reduce their spending this Christmas[12].

However, despite people’s best efforts, this extra debt could be hanging over many until the New Year, with those struggling saying it will take an average of four and a half months to clear[6].

The experience of a pricier holiday has also put future summer holidays in the balance, with nearly half (49%) of holiday makers vowing to delay going on holiday again until it becomes cheaper to buy foreign currency[13].

Tashema Jackson, money expert at uSwitch.com, says: “Many British consumers have been caught out by the weaker pound when traveling abroad this summer.

“There is little control you can have over foreign exchange rates, but there are ways you can help ease the financial strain of a trip away. A credit card offering 0% interest on purchases made abroad, for example, can help reduce the cost of your trip.

“For those struggling with post-holiday debt, it’s important to not stick your head in the sand. Balance transfer cards with an interest-free period could be a lifeline for those needing some breathing space. Those looking to transfer their debt should shop around to find the right card – and remember to carefully consider any transfer fees, as well as the length of the 0% offer.”

Find out how you could save over £1,000 a year with uSwitch here.

— ends —

Notes to editors

To illustrate rising holiday prices, uSwitch has looked at prices of holiday items over the summer based on the changing exchange rate[14]:

Item

Average cost in €s* Cost on
1st June Exchange Rate
(£1 = €1.29)**
Cost on
30th August Exchange Rate
(£1 = €1.17)**

Difference in cost

Family day-pass to Disneyland Paris

€220

£170.54 £188.03

+£17.49

Meal out for family of four

€60

£46.51 £51.28

+£4.77

A pint of beer €5.90 £4.57 £5.04

+0.47p

A glass of wine

€3.90

£3.02 £3.33

+0.31p

10 minute taxi ride

€15

£11.63 £12.82

+1.19p

Sun cream

€7.60

£5.89 £6.50

+0.61p

Beach ball

€3.80

£2.95 £3.25

+0.30p

Bucket & Spade

€5.70

£4.42 £4.87

+0.45p

One ticket to water park

€30

£23.26 £25.64

+£2.38

*prices are estimates based on online sources unless a specific source is highlighted
**Exchange rate taken from xe.com at 12:00 on Tuesday 30 August.

Top Balance Transfer card recommendations:

Balance Transfer Cards

 

Fee

0% balance length APR reverts

Other perks

Halifax Credit Card

3.5% 41 months

18.9%

 

Virgin Credit Card

4% 41 months

20.9%

 

Sainsbury’s Bank Credit Card

2.89%* 40 months 18.9%
  • *Reduced to 2.42% in first 3 months if you have a Nectar Card
  • Earn Nectar points: 2 points for every £1 spent on Sainsbury’s shopping or fuel. 1 Nectar point for every £5 spent elsewhere.
  • Bonus 5000 Nectar points if you spend £800 at Sainsbury’s in the first three months.

Balance Transfer Credit Cards (no fee)

Fee 0% balance length APR reverts Other perks

Halifax Credit Card

0% 25 months

18.9%

 

Tesco Credit Card

0% 24 months

18.9%

  • Earn club card points (1pt for every £4 spent in store, 1pt for every £8 spent elsewhere)

Santander 123 Mastercard

0% 23 months 18.4%
  • Cashback on spending in major supermarkets (1%), major department stores (2%) AND petrol stations and on train fairs (3%).
  • Free if you own a 123 Account, £3 monthly fee otherwise.

All research referred to was conducted online by Censuswide between 15th August and 18th August 2016, among 2000 adults who have been on holiday this summer

1. When asked “Was the total amount you spent on your summer holiday abroad more or less than you expected it to be before the trip?”, 17.9% answered “Yes, it was a lot more than I expected”, 41.4% answered “Yes, it was slightly more than expected”.17.9%+41.4%= 59.3%
2. Looking at the 59.3% sample from point 1, when asked “How much more did you spend than expected?’, the average was £491.71
3. Looking at the 59.3% sample from point 1, when asked “Why was your spending higher than expected?”, 45% answered “A weak pound (£) meant it was more expensive to pay for things on holiday (using cash, credit card, current account etc.)”
4. Looking at the 59.3% sample from point 1, when asked “How did you pay for any unexpected spending? (Tick all that apply)”, 34.2% answered “I used a credit card to cover unexpected costs”, 11.1% answered “I used my overdraft to cover unexpected costs”
5. When asked “To what extent do you agree with the following statement: My financial situation is worse now than it was before my holiday abroad”, 11.7% answered “strongly agree”, 34.2% answered “agree”. 11.7%+34.2%=45.9%
6. When asked “How long do you think it will take you to pay off any debt following your holiday abroad?”, the average time came to 4.5 months.
7. Looking at the 59.3% sample from point 1, when asked “Why was your spending higher than expected?”, 26.5% answered “When paying the final bill for the hotel / resort I was staying in, the price was higher than previously expected due to the weak pound (£)”
8. When asked “While on holiday abroad, did you have to make any sacrifices because your budget was tighter than you expected it to be? (Tick all that apply)”, 18.9% answered “I dined out at fewer restaurants and instead relied on cheaper food”, 18.8% answered “I bought less holiday presents for my friends and family”, 9% answered “I took extra food from the breakfast buffet so I didn’t have to buy lunch”
9. Looking at the 45.9% sample from point 8, when asked “Have you or are you planning to do any of the following things to manage any additional holiday debt?, 21.7% answered “Apply for a new credit card to cover my holiday spending (I have done this) and 19.6% answered “Apply for a new credit card to cover my holiday spending (I am planning to do this)”. 21.7%+19.6% =41.3%
10. Looking at the 45.9% sample from point 8, when asked “Have you or are you planning to do any of the following things to manage any additional holiday debt?, 16.9%answered “Take out a pay day loan (I have done this )” and 14.7% answered “Take out a pay day loan (I am planning to do this )”. 16.9%+14.7%=31.6%
11. Looking at the 45.9% sample from point 8, when asked “What lifestyle changes will you be forced to make as a result of your holiday abroad expenditure? (Tick all that apply)”, 26.8% answered “I am taking on an extra job/shifts to bring in extra money”
12. Looking at the 45.9% sample from point 8, when asked “What lifestyle changes will you be forced to “I will limit my spending this Christmas”
13. When asked “To what extent do you agree with the following statement: I will delay booking another holiday abroad while the pound (£) is weak”, 13.5% answered “strongly agree and 35.5% answered “agree”. 13.5%+35.5%=49%
14. To calculate costs, uSwitch choose an average price and then calculated the price in £s using the exchange rates on 1st June and 23rd August 2016 (source – XE Currency converter). Prices are estimates unless exact costs were available (e.g. price of beer source).

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