Windfalls 'wasted' on Luxury Goodies

Britons who come into cash through work bonuses, inheritance or redundancy pay are frittering over half of the money on holidays, new cars and luxuries, claim experts.

Only eight per cent of money from financial windfalls goes towards paying off mortgages or other debts while 52 per cent is poured into self-indulgent treats, according to figures from investment provider Birmingham Midshires.

Four out of ten people has received an average £5,944 windfall in the last year, but just under half of the money was put aside for a rainy day.

Nearly a third of money went on luxury items, 15 per cent was spent on holidays and six per cent on a new car.

Large bonuses were mostly used to treat winners to a break in the sun but redundancy payments were more likely to be used to pay off debts and 42 per cent of inherited cash was invested.

Jason Robinson, director of savings operations for Birmingham Midshires, said: "It's easy to be tempted to splurge when we get an unexpected windfall, but it is important to find a healthy balance between spending on luxuries and treats and the less exciting ways to use the money such as paying off debts and saving."

"Using bonuses, inheritance and redundancy money to save or invest for the future will eventually provide Brits with an even greater windfall when they need it most."