Debt issues may grow as ATM withdrawals rise

With Christmas approaching, December was always likely to be a busy month for the country's cashpoints. But new evidence has suggested the level o…

With Christmas approaching, December was always likely to be a busy month for the country's cashpoints. But new evidence has suggested the level of withdrawals has soared from last year, which could leave some in debt as they dip into overdrafts.

A Sainsbury's Finance study has indicated that December is on course to see £11 billion withdrawn from ATMs, which it notes is the equivalent of £354 million a day, £14.8 million an hour and £246,000 a minute.

Head of ATM's at the bank Alex Blake said: "December is traditionally the busiest month in terms of the amount of cash withdrawn from cash machines and we expect this Christmas to be no different."

However, the 2011 figure is up on last year's £10.3 billion, despite the fact that most consumers are worse off in real terms.

Sainsbury's Bank suggested the difference has been due at least in part to the better weather compared with December 2010, with only a few days of cold and snowy weather in contrast to last year's persistent sub-zero temperatures and heavy snow.

That may have ended up saving some people money last year as they could have shopped less and also not ventured out for parties and pre-Christmas drinks as much as usual, with the Office for National Statistics blaming the 0.5per cent contraction in the economy in the final three months of 2010 on the severe pre-Christmas weather.

However, extra spending could also mean more people going into debt, with cash drawn out on credit cards or pushing consumers deep into their overdrafts.

Earlier this month, ATM network Link revealed the value of withdrawals in the week leading up to December 4th was 11 per cent up on the equivalent period of last year.

Posted by Paul Thacker

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