03 Sept 2019 New research from Shawbrook Bank’s Personal Loans Division reveals for millions of Brits, annual trips abroad with the family can have a long-lasting effect on their finances.
The study shows that covering the cost of flights, hotels, car hire and other expenses for an annual getaway can stretch over several months for many families.
Holidaymakers are juggling these costs while dealing with opaque pricing and misleading advertising which makes managing their money more difficult.
Some 2.6 million Brits, or 5% of the adult population, say past holidays have taken them up to a year to pay off, while a further 1.6 million say that it has impacted their finances for two years or more after jetting away.
As many as 11.2 million holidaymakers say it has taken them anything between one and six months to sort all the costs from a previous holiday.
Official data from the ONS reveals August is the busiest month of the year for trips abroad by UK residents with 9.28 million visits recorded in August 2018.
Some travel companies wishing to take advantage of this increased demand advertise ultra-cheap deals to lure in customers, but these ‘teaser’ prices can often be in short supply. Moreover, the final sales price can end up being much higher than the one advertised which can cause frustration to customers.
Analysis by Shawbrook shows that this marketing trick can bump up the cost of flights, train fares and car hire by up to 641%, 213% and 295%, respectively. 60% of Brits surveyed feel cheated by this practice as it means they could end up forking out much more than they anticipated.
ONS figures also show Brits’ spending abroad tends to spike during August which is traditionally the only complete month of the UK school summer holidays. In August 2018, Brits spent £6.3 billion on overseas visits compared to £4.4 billion in July 2018.
Sadly, holidaymakers have been hit hard by the falling value of the pound against the US dollar and the euro in recent weeks. For those families looking to jet off before the start of term they could find they get less than they bargained for when they arrive.
Paul Went, Managing Director, Consumer at Shawbrook Bank says: “A family holiday to a warmer climate is the highlight of the year for most people. But it’s clear that for many, it may also leave them fretting over their finances for months or, in some cases, years afterwards. That’s why it’s so important that companies are transparent about costs right from the outset so that families can budget accordingly. Sadly, this practice is not limited to the travel industry and misleading ‘teaser’ rates can be seen in the advertising of products like personal loans, train fares and festival tickets. By advertising misleading prices companies risk putting households under financial strain as they end up having to pay more than they bargained for.
“To make matters worse, many of those hoping to jet off before school starts could find they get even less value for money than usual, thanks to the recent fall in the pound. By planning ahead, you can ease the pain a little. Shopping around for the best deals, using any air miles you have, staying a little further away from the centre, making your own food while you’re away – there are several ways you can lower the final cost of your holiday. If you plan well, your dream holiday needn’t turn into a financial burden.”
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