In these uncertain times, financing a getaway may not be as straightforward as before. Here we will look at different methods Brits are using to pay for their summer holidays.
After many months of lockdown, Britons are once again dreaming of far-flung destinations as international travel has been opened up once again.
The government is routinely updating which countries can be visited without the need for quarantine measures and this is heavily influencing where people are travelling to.
In these uncertain times, financing a getaway may not be as straightforward as before. Here we will look at different methods Brits are using to pay for their summer holidays.
Loans
Whether long-term loans from a financial provider or borrowing from a family member, it is becoming increasingly common for people to take on a loan to fund their holiday.
A MoneySuperMarket poll revealed that almost half of 2,000 Brits were willing to borrow when paying for a holiday, with bank loans the third most popular method of raising money to go away.
Taking out a loan to pay for a holiday may provide a useful way of affording a holiday that might otherwise be out of your financial reach. However, it is crucial that you are able to afford the repayments before you take out a holiday loan.
Credit cards
Ahead of loans in the methods used to pay for holidays were credit cards.
Similar to a loan, a credit card enables you to pay for a holiday upfront and then manage repayments over time. Running your own affordability check is another crucial task.
Paying for holidays on your credit card can offer several benefits. Your outlay will generally be protected by the Consumer Credit Act, which will protect you if the holiday is cancelled in certain circumstances.
You may also be able to get good deals on travel insurance and foreign currency by using your credit card – it’s worth checking your provider for more information.
Savings
It’s perhaps little surprise that dipping into personal savings is the most common way of paying for a holiday.
It is one of the most traditional uses of savings and 88% of Brits use their savings to fund their holidays according to MoneySuperMarket.
Doing this comes with clear benefits, you will carry no debt burden and can track how much you can afford easily.
How much do people borrow for a holiday?
According to MoneySuperMarket, Brits borrow more than £100million annually in loans designated specifically for paying for holidays.
The data revealed that periods involving the most activity included October, November and January – clearly many of us try to beat the winter blues by booking a holiday for the following summer!
Doing this also offers people the chance to pay off a good chunk of the loan before going away, an important factor when you will want to have spending money for your getaway.
Are you planning a holiday in the coming months, or for next year? How will you find the money to pay for it?
