July 2005

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Brits not going on summer holidays due to lack of financial confidence

WE’RE NOT GOING ON A SUMMER HOLIDAY’, SAY NEARLY A THIRD OF BRITS1
Lack of financial confidence is key reason why Brits are staying at home

Nearly a third (30%) of people won’t be taking a holiday this year as financial confidence is falling for one in five Brits (21%) in the past three months, according to MORE TH>N’s quarterly Consumer Barometer.

Of those who are going without a break this year, 42 per cent simply can’t afford one. Sadly over one in ten (12%) say they can NEVER afford to get away and 9% just don’t have the time.

MORE TH>N’s Consumer Barometer found the reason people were planning to forfeit their annual holiday could be down to a lack of confidence about their personal financial situation. Over a quarter of Britons (26%) said they were either not very confident or not at all confident about their current finances. A fifth (21%) also claimed confidence in their money matters had fallen over the past three months.

Graham Hollebon, Head of Personal Finance at MORE TH>N, says: “It seems from our research that many Britons won’t be heading for a break in the sun this year because they simply can’t afford it or would rather focus on paying off debt or saving money. Even those taking time off to relax admit they’ll be reining in their budget this year and plan to spend less on their annual holiday.

“Financial confidence has fallen for around a fifth of Brits in the last three months, which could indicate why many are deciding to ditch holiday plans this year. The outlook for house prices continues to be unsettled and with interest rates remaining on hold it is little wonder that people are watching their spending quite carefully.”

MORE TH>N’s study found people were most likely to be saving money at the moment (31%), paying off debt (30%) or for over one in ten (11%), spending more than they can afford.

Watching the pennies… or the euros
Even holidaymakers admitted they intended to cut back this year – over one in ten (13%) said they were planning to spend less than usual on their trip away. Those intending to watch the pennies this year said they had either spent more than usual last year (26%), were saving for something else (19%), were not as well off (17%) or were just not sure of their financial future (15%).

Covering the cost of the Costa
Dipping into savings is how 41 per cent of Brits say they pay for their annual holidays. However, credit cards are also heavily relied upon as a payment method, with over a quarter (27%) saying they pay on their plastic and then pay off in full when they return. A further one in ten (13%) pay on a credit card and then try to pay it off bit by bit. Desperate to get away, 1% said they’d go into their overdraft and 0.5% would take out a loan.

Graham Hollebon comments: “If you are paying for your holiday on plastic and can afford to pay the debt off in full then choose a card with cashback to earn a ‘discount’ on your holiday. For example, MORE TH>N’s credit card offers customers a cashback return of up to 0.8% on purchases.”

When on holiday nearly half (46%) favour cash to cover the costs of their spending; travellers cheques are favoured by 16 per cent and over one in ten (14%) use a credit card whilst away.

MORE TH>N’s Personal Finance unit, which offers life insurance, critical illness cover, mortgage protection insurance and a credit card and travel insurance, introduced its Consumer Barometer in April 2005 to monitor the true opinions of the ‘average person on the street’. The Barometer will be published regularly and over time should illustrate the ups and downs of the nation’s financial mood swings.

To find out more about MORE TH>N visit the website at www.morethan.com or call free on 0800 801558.

Ends

Notes to Editors:
1. Research conducted in July 2005 by Panel Wizard, online and via the telephone, amongst a representative sample of over 1,000 Britons aged 16+.

About MORE TH>N:
MORE TH>N is the direct financial services arm of Royal & SunAlliance. It offers motor, home, pet and travel insurance, as well as life insurance, critical illness, mortgage protection insurance and credit cards via the internet and by phone.

Further information:
Claire Germain
MORE TH>N External Communications
Tel: 020 7337 5602
Email: claire.germain@uk.royalsun.com

MORE TH>N is a registered trademark of the Royal and Sun Alliance Insurance Group plc and a trading style of Royal and Sun Alliance Insurance plc (No.93792). Registered in England and Wales at St.Mark’s Court, Chart Way, Horsham, RH12 1XL. Authorised and regulated by the Financial Services Authority.

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