Brits ‘urged to get debts under control in January’

Adults in the UK are being encouraged to use the new year as a fresh start when it comes to their finances.

Figures from the National Debtline show that the organisation has dealt with 158,293 calls for help with credit card debts in the past ten Januarys. Over the past decade, a pattern has developed whereby a lull in the number of people seeking advice in December is followed by a sharp rise in the following month.

This January is expected to return similar results, as a large proportion of people in the UK are thought to have used credit cards to fund their Christmas purchases.

Joanna Elson, chief executive of the Money Advice Trust – which runs National Debtline – said: "December can be a tough month on household finances and lots of people use credit cards to manage the upturn in spending. This can be a sensible way to manage financial peaks and troughs, but can be dangerous if you don't have surplus money left over in the other months to pay off debts accrued over the festive period."

As a result of this, Ms Elson said it is a good idea for people to spread the cost of Christmas across the year. She advises people to divide the total by 12 and try to put that amount away every month, as this means they will be in a much healthier position when the next festive period comes around.

People who are struggling with debts – whether from Christmas or just accrued over the course of the year – should seek advice on how they can take back control of their finances. Provided they owe at least £10,000, an individual voluntary agreement (IVA) could be the perfect option.

The serious financial undertaking typically lasts for five years and individuals are allowed to write-off all the debt they are unable to repay within the IVA after this time period. It also reduces monthly repayments to a more manageable sum and stops unwanted contact from creditors.

By Joe White