Britons 'splurging on holidays'

People in the UK are choosing to spend their money on holidays rather than saving it for a rainy day, it has been found.

According to a survey carried out by Abbey Savings, one in four Britons said they think a holiday is the best way to spend excess money, while 33 per cent said going on expensive holidays was one of their top three priorities.

In addition, the average person spent 10.1 per cent of their annual income on their holiday each year, with 62 per cent using their savings to pay for their summer break.

Reza Attar-Zadeh, director of savings and investments at Abbey, said: "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. With savings rates at excellent levels, there has never been a better time to save for the future."

The findings tally with comments made by the editor of the Lonely Planet books earlier this month, who said that people are increasingly seeing their holidays as non-negotiable.

Meanwhile, a study by financial advice company Cleardebt found that residents of the City of London who are in debt owe the most money, with average borrowings of £41,002.

Debtors in Kirkwall, Orkney, were found to owe the least, with £4,188 of debts.