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Media centre /
Press releaseHOLIDAY FUN LEADING BRITS TO FINANCIAL HEATSTROKE20 June 2008
British holiday makers are not in control of their holiday expenditure, according to the latest NS&I Quarterly Savings Survey. With a fifth (20%) failing to look at their financial situation before booking their holiday, and over three-fifths (61%) overspending while away, it is not surprising that over a quarter (26%) of the population said that they were alarmed at how much money they had spent after returning home. Of the 61% of the population that admit to overspending while on holiday, on average each person claims to exceed their planned spending by over £133. Nearly half of Brits (49%) who overspend on holidays say they do so simply because they feel like they are ‘worth it’. While for nearly a third (30%) of people spending more than they expect is a result of getting caught up in the excitement of being on holiday. Worryingly, nearly one in ten (8%) attribute overspending to a lack of understanding of exchange rates and being ‘caught out’ as a result.
No thought for financial consequences Each year Brits spend a considerable amount of money on holidays (nearly one in ten, 7%, spend over £2,500 per year). But despite the large amount of money involved, many Brits fail to plan their holiday finances. Over a third (34%) of Brits do not have a budget for spending money while away and confess to not worrying what they will spend. And a quarter (25%) of people save up specifically in advance to pay for their holiday. Exchange rate confusion It is not surprising that exchange rates have a detrimental effect on our finances. Over two-fifths of those holiday makers surveyed (43%) stated that foreign currency did not feel as ‘real’ as pound and pence and 40% said they were not always aware of the current exchange rate when travelling. 43% of people claimed they try to convert foreign currency into pounds at the start of their holidays, so they have a rough idea of costs, but confessed that this discipline rarely lasts the whole time they are away. Paying for those unplanned little extras Over half (57%) of people who overspend on holiday do so because they are buying gifts, souvenirs or clothes. Another unplanned cost is ‘extra activities’ such as adventure sports, on which nearly a third (31%) find themselves spending more money. And catching nearly a quarter (23%) out is those ‘hidden incidentals’ that are often forgotten about when budgeting, such as transport costs to and from the hotel. Dax Harkins, senior savings strategist at NS&I, said: “There is no doubt that holidays and spending while abroad are costing Brits a lot more than many bargain for, but people need to think past simply enjoying themselves and to plan their finances so there are no nasty shocks when they get home and face the bills. Given the expense, it is great to see that a quarter of people do save in advance, but it is clear that more of us need to set money aside specifically for holidays or the holiday spirit will come back to earth with a bump on the return home.” When the fun’s over, the pain begins As soon as the holiday begins to recede into a happy memory, people have to face the consequences of lack of planning. Nearly half (47%) of people admitted they did not look at how much money they had spent while they were away, so it is not a surprise that over a quarter of holiday makers (26%) said they were alarmed at how much money they had spent. A fifth (20%), however, said they were never surprised to find out how much they had spent on holiday, as they never even set a spending limit for when they were away. Planning ahead This tendency for Brits to bury their heads in the financial sand is concerning, especially given the importance people put on their foreign breaks - almost a third (31%) of Brits confessed they were already thinking about their next holiday before returning from the last. However many people are not giving themselves enough time to save for such outgoings, as just over a fifth of holiday makers (21%) say they tend to book holidays spontaneously or less than one month in advance. Interestingly, over a quarter (26%) of those British holiday makers with the lowest personal monthly take home income (under £500), and who often have the greatest need to be practical when planning finances, are the group most likely to book holidays on the spur of the moment. People want to save more this spring Examining the savings indicators in spring 2008, a significant discrepancy is revealed between what people ideally want to save each month and the extent that they are actually doing so, indeed people appear to be struggling to save. During spring 08: The ideal monthly amount that the population wants to save has risen to its highest ever level, £195.67, but these aspirations are not being reflected in the amounts that people are actually managing to put away. The average amount saved per head across the population has fallen to £82.87 The amount of people that are regularly saving money each month has fallen to below half of the population (47%), compared to 52% in winter 2007/8. The population is becoming increasingly pessimistic about its ability to save, both in the coming quarter and looking forward to the year ahead. 32% of people said they were less likely to save in the coming year. ENDS Notes to editors Quarterly Savings Survey For a PDF of NS&I’s Quarterly Savings Survey or further information on the statistics supplied in this release please contact the NS&I media team. Further information and previous copies of the survey are available from http://www.nsandi.com/press-room/savingsurvey/index.jsp The telephone survey, which questions people about their savings habits, was carried out by TNS among 2,061 GB adults aged 16+ between 18 April and 27 April 2008. The full Savings Survey telephone research was carried out by TNS among 3,045 GB adults aged 16+ between 29 February and 4 May 2008. Dax Harkins is available for interview and high-resolution photographs can be supplied. Contact the media team to arrange an interview or request photographs by e-mail. Selected regional data for the Quarterly Savings Survey is also available on request. About NS&I NS&I is one of the UK’s largest financial providers with 28 million customers and over £84 billion invested. It is best known for Premium Bonds, but also offers Savings Certificates, Direct ISA, Guaranteed Equity Bonds and Children’s Bonus Bonds in its range. All products offer 100% security, because we are backed by HM Treasury. NS&I products are available over the telephone, internet, post and by standing order. They are also available through a network of 13,500 UK Post Office® branches. Customers can also pick up brochures for our Premium Bonds, Inflation-Beating Savings and Income Bonds at retailer WHSmith in 400 of its High Street stores and 155 of its travel stores.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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