More than one million British holidaymakers will risk falling into a vicious debt cycle this summer as they plan for their summer vacations without having paid for last year's trip, new research suggests.

A leading online personal finance service found that 1.4 million UK residents have still not fully paid for their holidays last summer, a large proportion of which are funded with loans and credit cards. Although the average holidaymaker takes four months to pay off their holiday borrowing, a further 926,000 people took more than one year to clear their vacation debts.

With interest rates currently sitting at 5.75 per cent and a move up to at least six per cent likely at some time this year, this research suggests that a number of people could become the victims of spiralling debts.

A recent survey by Lloyds TSB indicated that as many as 25 per cent of teenagers travelling abroad with their friends this year are expecting they will need to call their parents for more money while away and over a third (38 per cent) of all parents were worried that their children would overspend.

The survey revealed that younger generations are failing to learn how to adequately budget for their trips, suggesting that holiday debts could become a worsening problem in the future.

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