New research by MoneySuperMarket today reveals that millennials are borrowing millions more than other age groups to pay for their holidays, with 18-34 year olds taking out over £130 million in holiday loans since 2016. Holiday loan borrowing by all other age groups combined totals around £15 million less for the same period (£119.2 million).
The study shows that almost half (48 per cent) of Brits are willing to borrow money in some capacity to go on holiday, with holiday loans now being the third most common way to fund a trip after saved cash and credit cards.
Millennials are most likely to borrow to fund their travels, with over a fifth saying that they would consider a holiday loan. Two in five millennials who said they would take out a holiday loan would be open to using it to upgrade their hotel, compared to only 12 per cent of those aged 35+, while a quarter would use a loan to upgrade to an all-inclusive holiday.
When looking at the length of the loan, 44 per cent of Brits expect to take less than a year to pay off their debt. This figure rises for millennials, with over half (53 per cent) believing that they’ll be able pay off their holiday loan in less than a year. In reality, the average term is nearly two and a half years (29.3 months).
When it comes to millennials who are considering a holiday loan…
44 per cent would go abroad rather than staycation
25 per cent would upgrade to all-inclusive
21 per cent would go up one or more stars in accommodation
17 per cent would extend the length of their stay
17 per cent would fly business or first class
15 per cent would upgrade to a hotel with an infinity pool
Brits could be spending over 40 per cent more on their holidays than they initially predicted. The research found that on average, Brits are willing to borrow £1,715 to fund a holiday. However, the actual average holiday loan amount according to MoneySuperMarket is just over £3,000 – meaning that a large percentage of Brits could be spending more than anticipated.
The average holiday loan amount also varies widely depending on where you live in the country, with Birmingham being crowned the holiday loan capital of the UK2. Birmingham accounts for over £7.5 million of the UK’s holiday loans since 2016, with Belfast and Glasgow following with £6.9 and £6 million respectively.