32% of Britons use credit to cover cost of Christmas

Almost one-third of UK adults will rely on credit in order to make it through Christmas. 

Research by the Money Advice Service has discovered …

Almost one-third of UK adults will rely on credit in order to make it through Christmas. 

Research by the Money Advice Service has discovered a significant portion of the population have not put enough money away throughout the year to fund the festive period and instead will be using credit cards, overdrafts and, in some cases, payday loans. 

This is obviously a disconcerting situation, as these people may end up with severe debt problems if they cannot afford to make the repayments in January. In order to prevent such a situation developing, consumers should look to improve their financial management skills. 

Around £24 billion is expected to be spent during the Christmas period – this is down on the figure of £25 billion from 2012 – and this equates to an average of £487 per person.

Financial pressures 

The expectations surrounding Christmas are already taking their toll on some people, as 38 per cent are worried about how they will be able to afford Christmas, despite the fact it is still nearly two months away.

On top of this, 34 per cent expect to start the new year in debt as a result of their spending pattern over the festive period – nine per cent are still in arrears from 2012. Worryingly, 40 per cent of respondents admit they put themselves under pressure to deliver a 'special' Christmas. 

Jane Symonds, head of service delivery at the Money Advice Service, said: "Christmas is an exciting time to catch up with family and friends but can also be a worry financially, and very stressful if money is tight. Getting to grips with the costs in advance of the big day will help you take control of your spending and alleviate some of the pressure."

Why are people overspending? 

It's very easy to get caught up in the hullabaloo surrounding Christmas and spend more than anticipated. In terms of specific pressures, pleasing loved ones (51 per cent) was found to be the most common.

This was followed by wanting to make sure children had the perfect Christmas (47 per cent), being tempted by special offers (29 per cent), a desire to buy youngsters the latest must-have gadget (19 per cent) and failing to set up a proper budget (13 per cent).

The research highlights the importance of putting a plan in place for the festive period, as this way consumers will know exactly how much they can afford to spend and should not have to rely on credit. 

Common sense spending

However, there are signs that common sense is starting to prevail. Research by HSBC has discovered shoppers are planning to spend seven per cent less than they did last year as they seek to tighten their belts. 

Britons are turning to various money saving ideas in order to cut costs, including using reward points (45 per cent), discount vouchers (44 per cent) and cutting people from their present list (15 per cent).

Of course, the easiest way to avoid falling into debt is to put money aside throughout the year specifically for Christmas. 

By Amy White

Tell others:

shortlink

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close