Loqbox, the financial wellbeing firm, has revealed that budget-conscious UK holiday-goers are opting to dip into their savings to fund summer travel plans; and are going as far as reducing credit borrowing to ensure they can get away for a break this year.
While the cost-of-living crisis continues to impact UK household budgets, the willingness to prioritise travel is significant, according to the recent Loqbox survey findings. It also discovered a renewed interest in building up personal savings buffers to reach lifestyle goals.
Conducted in conjunction with UK polling platform, OnePulse, Loqbox surveyed a range of UK inhabitants on their travel plans and how to afford them. When asked how they are planning to pay for any summer travel plans this year:
- 41 per cent of respondents said they are using existing savings
- 35 per cent are making dedicated savings each month
- 13 per cent said that they would use a credit card
- seven per cent are turning to travel rewards points
- six per cent intend to borrow from friends and family
- five per cent are considering other forms of borrowing
While a smaller portion of respondents opt for credit to fund their holidays, with even fewer resorting to loans or borrowing from acquaintances, the use of travel rewards points indicates ongoing participation in travel loyalty programmes as a cost-effective way to afford holiday plans.
Gregor Mowat, co-founder and co-CEO of Loqbox and member of the responsible business network Business in the Community cost-of-living taskforce, added: “People across the UK are grappling with the ongoing cost-of-living challenges, but the importance they place on saving for their holiday travel plans is a strong signal of how they’re willing to financially adapt to achieve their lifestyle goals.
“With high-interest rates increasing the cost of borrowing, it’s heartening to see that more people are exploring the use of savings tools and more affordable credit alternatives. As more individuals are turning to Loqbox for financial guidance, we’re proof that improving access to financial education is making positive impacts across society.”
The importance of financial education and personal budgeting tools
Given that most respondents are self-funding their summer travel rather than relying on credit and borrowing, Loqbox cites the associated costs of borrowing as another strong indicator that people are leaning more towards self-management and individual financial planning over-reliance on credit.
Tom Eyre, co-founder and co-CEO of Loqbox, commented: “Our survey findings reinforce a shift we’ve seen in consumer behaviour over the past couple of years. Although the appetite for summer holidays remains strong, people in the UK are increasingly recognising the importance of saving to afford major expenses like travel. Having financial buffers in place means people are less reliant on costly forms of credit and other types of borrowing.
“Some of our respondents have indicated they’ve made significant cutbacks, like reducing overall spending and eliminating some expenses altogether to afford their travel plans.
“Lifestyle changes such as cutting back on social activities and discretionary spending like TV packages and clothing purchases were mentioned frequently. Overall, the survey underlines our view that with access to the right financial education and personal budgeting tools, people are empowered to make more informed and responsible purchasing decisions and boost their financial well-being.”
However, a significant 23 per cent of respondents revealed they have no travel plans for 2024, with economic factors playing a big part in this.
A small number of individuals said they do not actively plan for travel financially, indicating a more spontaneous approach to holiday decisions based on current affordability, and are likely to arrange travel plans when they have an influx of cash from events or workplace bonuses.
