Does your latest contract say anything about continuous employment?
Companies normally prefer people to take holiday within the notice period as it saves them paying actual money in lieu. However if you are in a vital role, it should be in your contract whether you can take holiday or if you have to work it out. If it's not there, you don't have to.
( The Cat's Mother Not a People Person., Sun 17 May 2009, 22:10, archived)

Thanks
Contract was written before I was in a vital role, so it isn't there.
( magnum, Sun 17 May 2009, 22:18, archived)