Christmas and the festive financial hangover - Business Works
BW brief

Christmas and the festive financial hangover

Michael Ossei of T he majority of Brits (62%) will have struggled to pay for Christmas this year, with almost three in ten (28%) ending up in the red, according to Michael Ossei, personal finance expert at The research shows that, while the financial hangover will last almost 6 months on average, almost one in ten people (8%) will still be in debt next Christmas.

"Cash-strapped consumers will be feeling a little short of Christmas cheer after another tough financial year," said Michael. "While the cost of living has rocketed, pay has been frozen or even cut and even those who have enjoyed a pay rise will have seen the benefits eroded as household bills soared. Splashing the cash at this time of year is very tempting, but for those already feeling the pinch, a very merry Christmas could have led to a financial hangover that will last well into next year."

With six in ten people (62%) having struggled to pay for Christmas this year, Brits face a New Year blighted with debt according to the research. Over a quarter of people (27%) be in the red because of Christmas spending, with the average post-Christmas debt adding up to an eye-watering £274.

However, of those who have got into debt this Christmas, more than a quarter (27%) could end up with over £300 of debt. On average the festive financial hangover will last almost 6 months as people strive to pay off their Christmas bills, but almost one in ten (8%) will still be clearing their debts next Christmas.

Following a year of rising living costs and pay freezes, almost half of consumers (48%) were more worried about how they would pay for this Christmas than last year. The same number (48%) said that they had less money this Christmas than last, and a third (36%) expected this Christmas to be a much more frugal one than in recent years. And the recent squeeze on finances has left people ill-prepared for the festive season. One third (34%) have not been able to save for Christmas over the year.

In order to put presents under the tree and food on the table, more than half (52%) will have dipped into their savings, while over a third of savvy consumers (36%) will have used up hard-earned shopping vouchers or reward points. But worryingly, more than four in ten (42%) will have had Christmas on credit this year – 4% will even take out new credit especially to fund Christmas.

A further 16% will have sold possessions in order to get the Christmas cash they needed and 3% will have borrowed from friends and family. Although over half (51%) have budgeted, things were so bad that one in ten (10%) had no idea how they would pay for Christmas this year.

"If you’re struggling with your festive finances and are thinking of turning to credit," concludes Michael Ossei, "I would urge you to use credit cards sensibly. Putting your spending on a card with 0% on purchases could give you some breathing space. The Tesco credit card gives you 15 months at 0% - meaning you can save up until March 2013 to pay off your bills. Or, if you can afford to clear your bills in full every month, a card offering cash back or rewards could help pay for next Christmas. And if you’re struggling to clear existing debt, transferring existing credit card balances to a leading balance transfer card, such as the Barclaycard Platinum Extended Balance Transfer card, could save you around £600 over 22 months."

For more information:

Tweet article
BW on TwitterBW RSS feed