Debt Management Plans could be required for many Brits this year who are lucky enough to be going away on holiday.
New research from M&S Money found that almost a third (32 per cent) of holidaymakers believe they’ll spend more money while they are abroad this year.
Despite the economic climate, the data suggests an average of £365 extra will be spent for every holidaymaker. The analysis also found that 32 per cent of holidaymakers believe the additional expense is due to rising inflation pushing up the cost of living.
However, despite rising prices, many holidaymakers are taking extra care to keep their holiday budgets in check, with 42 per cent believing they will spend the same as last year and 17 per cent actually planning to spend less.
Those who are planning to spend less on their holiday believe they will cut their spending by an average of £326. However for half of travellers spending less, it simply comes down to having less disposable income due to increased costs elsewhere in the home.
When it comes to where the majority of holiday spending money is going, 44 per cent of holidaymakers believe they will spend the most money on eating out, although one in ten (12 per cent) are planning on spending on day excursions, such as fishing trips or a diving experience.
Should holidaymakers find their annual holiday has tipped them further into debt an effective form of debt consolidation could be found with a Debt Management Plan (DMP).
Suitable for people with at least £3,000 of debt – debt management will consolidate payments into one lower monthly payment. The plan is usually an informal arrangement between the debtor and their creditors to allow them to invite manageable structure to their relationship by reducing the debtors monthly outgoings so they only pay what they can realistically afford, based on their income and expenditure.
The amount that a debtor will asked to repay is around half of your existing monthly payments however this will depend on individual circumstances of the debtor. To consolidate debt in this way will reduce your monthly payments making your daily life more financial comfortable however you will make payments for longer and the overall amount that you repay will be greater than if you kept up with your original payments.
A debt management plan is only suitable for unsecured debt such as spend on holidays built up on an overdraft, unsecured loans and credit cards. It can be set up on your own by contacting your creditors directly or by contacting a reputable debt advice agency who will manage the process on your behalf.
This is a guest post by Tara Kynaston