Many of us feel the pinch when it comes to Christmas. As wonderful as the festive season is, it puts a tremendous amount of pressure on us to spend a considerable amount of money on creating the ‘perfect Christmas’, whether this be on buying lavish presents for loved ones, buying an excessive amount of food and alcohol for the Christmas festivities, or the amount spending travelling to see family and friends near and far, the costs soon add up. Millions of people in the UK are accumulating debt to be able to have Christmas, according to statistics.
In a poll carried out by comparison site uSwitch involving over 4,000 consumers, a staggering one in four of us ends up starting the next year with a credit debt average just under £500 (£452). The same poll revealed that across the UK, British shoppers end up loading almost £8.5 billion of debt onto credit cards in order to pay for Christmas. Many are also using bad credit loans in order to cover the costs of festive season too.
With Britons inundated with adverts on social media, TV and radio, it isn’t a surprise that many feel the pressure to spend money during the month of December, but the consequences can be dangerous. It can lead people ending up getting into a cycle of debt, or spending the rest of the following year paying all their debts off.
In the aforementioned study by uSwitch, over half surveyed believed that it was likely they would still be making repayments on Christmas spending for this year in the following December. Almost half (48%) stated that they were worried about the level of debt they could end up accumulating over Christmas and paying into the New Year.
The Disposable Income Index (DII) for 2017 by Scottish Friendly, an ISA provider revealed some stark findings about Christmas debt too. Over three-quarters of households that had children stated that they had made financial sacrifices in order to buy Christmas presents.
This was most commonly in the form of using their credit card to pay for purchases, or through taking out a payday or unsecured loan. Similarly, millennials were found to really feel the pinch too. Three quarters of those surveyed also said they were making financial sacrifices to buy things for loved ones at Christmas time. It was estimated that around 14 percent of these millennials intended to take out a payday loan so they could achieve this.