A new survey by financial wellbeing leader Loqbox finds that budget-conscious UK holiday-goers are cutting down on credit borrowing to fund their summer travel plans, and instead are dipping into existing savings.
Even as the cost-of-living crisis continues to bite into household budgets, the willingness to prioritise travel is evident in the survey findings, along with 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.
According to Loqbox, the reliance on existing savings as the most common response highlights the extent to which travel remains a priority in the current economy. While a smaller portion of respondents are opting 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.
When asked what the most important factor is when choosing a payment method for summer holiday travel costs, fees and interest rank as top of mind. Security and convenience followed as being factors that influence preferred payment method, while the amount to be repaid, repayment options and rewards rank as least important.
Given that most respondents are self-funding their summer travel rather than relying on credit and borrowing, Loqbox cites associated costs of borrowing as another strong indicator that people are leaning more towards self-management and individual financial planning over reliance on credit.
In stark contrast, 23% of respondents said they had no travel plans for this year, possibly influenced by economic factors. A small number of individuals mentioned that 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.
Tom Eyre, Co-Founder and Co-CEO of Loqbox, said, “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 wellbeing.”
Gregor Mowat, Co-Founder and Co-CEO of Loqbox and member of the Business in the Community (BITC) 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.”
