HOLIDAY-MAKERS have been forced to raid savings accounts after being hit by unexpected costs for their vacations as they splash out on more extravagant breaks as the economy picks up.
Holidays are the top reason for saving money in Yorkshire, with 29 per cent setting money aside for trips in the last three months, new figures from the Halifax reveal.
But holiday-makers are under-estimating the cost of their breaks, with 15 per cent raiding savings to make up the shortfall for holiday costs, the bank said.
Head of Halifax Savings, Richard Fearon said summer typically saw people dipping into their savings, as the cost of holidays put additional pressures on every day finances.
He said: “While many have specifically saved for their holiday over the year, it seems that they may also be underestimating the cost. As a result, savings pots have been unexpectedly raided to make up the shortfall.”
Rising numbers of people regularly putting money aside was encouraging, he said, leaving people more likely to cope financial when unexpected costs arise.
In total, 35 per cent of Yorkshire savers admitted raiding their accounts, with paying for emergency home or car repairs was the top reaso. One in ten admitted plunging into savings to pay for impulse or luxury buys, and when overspending in their current accounts.
Mother-of-two Sarah Payne, from Halifax, took £4,000 from the family’s savings to pay for an all-inclusive trip to Turkey this summer.
She said: “It had always been there as rainy day fund, and although it’s a big expense, booking during the school holidays, we thought ‘let’s do it’.
“We were confident that we’d be able to build the savings back up, and when it’s building up little interest in the bank, there’s no point denying ourselves a holiday.”
Guy Saunders, managing director of Stillington-based travel company Planet Rail, said people are still willing to save up and splurge on once-in-a-lifetime trips.
He said: “We set up in 2008, in the recession, and each year it gets busier. People are willing to push the boat out, especially when they are not getting much return on their savings.”
Further research by travel company Expedia shows that holidaymakers are missing out on the best deals by failing to search for seasonal sales, ignoring currency fluctuations when booking international deals, and adding extra costs by forgetting to factor in extras like paying for wi-fi.
This was backed by independent travel agent Gordon Rozario, owner of RTC Travel Consultants in Wakefield.
He said people were under-estimating their cost of their trips by hundreds of pounds comparing prices online, only to find that ‘extras’ like in-flight meals and transfers added-on at the online checkout.
Mr Rozario added: “A lot of people shop around on the internet but end up coming back to us to find the best deal. The price we quote is the price you pay.”