Lack of savings to cause more debt?

A lack of savings could lead more Britons into debt this Christmas, it has been warned.

Financial services firm NS & I has found in a poll that…

A lack of savings could lead more Britons into debt this Christmas, it has been warned.

Financial services firm NS & I has found in a poll that of those planning to spend money this Christmas, only 20 per cent have a savings pot set aside for presents and other expenses, down from 29 per cent two years ago.

It noted this means 43 per cent of people having to find extra money as opposed to 34 per cent in 2008, something it said could cause “a financial hangover in the New Year”.

The risk of extra debt along with the general economic situation may go a long way to explaining findings that many people are looking to cut back on what they spend, with 13 per cent deciding on the Scrooge option of spending no money at all.

Around two-thirds of people are cutting back by agreeing with their family to cap spending, or to simply buy fewer presents for their kin.

Others will save money by spending less on entertainments and associated elements, such as the money for taxis home after a night out, while 34 per cent of people are planning to make cards, decorations and presents.

The findings of the survey are in line with a number of other recent studies showing many people are trying to make adjustments this year, which for some could help them to avoid getting into deeper debt.

When it comes to family spending, a survey by LV= last week appeared to suggested children would be protected from savings cuts elsewhere, with 53 per cent of parents spending as much if not more on their children, while 62 per cent are cutting back on other relatives.

By Joe White

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