Consumers ''are using savings to fund luxury holidays''

By MoneyhighStreet Staff. Published on August 19, 2008 This post currently has no comments.

man enjoying cruise
People from the UK are risking future debt by opting to spend any "excess money" they have on holidays, rather than saving it for emergencies.

New research from Abbey revealed that 26 per cent of people from the UK think that taking a holiday is the best way to use up any extra money they come into.

In total, people typically spend £1,650 going on holiday each year and 62 per cent use their savings to pay for these holidays.

This means that consumers are losing out on as much as £3.2 billion in interest that could be used to help guard against future debt.

Worryingly, 46 per cent of Britons did not put saving for the future as one of their top three financial priorities.

"If people cut back a small proportion of the amount they spent on holidays and kept their savings, this would make a real difference to their financial wellbeing," commented Reza Attar-Zadeh, director of savings and investments at Abbey.

"With savings rates at excellent levels, there has never been a better time to save for the future."

Recently, Yorkshire Bank suggested that the credit crunch had changed consumers'' attitudes towards saving and debt management. It claimed that the economic crisis had destroyed the country''s ''spend now, pay later'' culture.