Overspending at Christmas can lead to serious debt management difficulties and sometimes cause people to enter insolvency, one expert has claimed.
Richard Sheppard from financial advisory firm AWD Chase de Vere suggests that excess spending over the festive period is a major reason why February and March are “peak times” for British consumers to declare themselves insolvent.
In order to avoid the potential debt management pitfall, Mr Sheppard urges consumers to start an effective savings routine using appropriate services before it proves to be too late.
“Every year … the clients that I come across say that it’s never going to happen again, and they’re going to start saving straight away, but spending always exceeds savings,” remarked Mr Sheppard.
Reflecting on how best to ensure financial security over the festive period he commented: “Set up a direct debit and make sure that the actual savings are put into a separate account.”
The average amount of debt for a UK household stands at more than £8,840 excluding mortgage arrears, according to data from the Credit Action organisation.