The festive season puts a lot of pressure on people to spend money that they don’t have on events, seeing family members and buying expensive presents for loved ones. This isn’t even taking into account the innumerable adverts on TV, radios and on the internet encouraging people to spend at Christmas, as well as the sales that take place in November, notably Black Friday and Cyber Monday. This can end up with people being tipped into getting into debt as a result of their excessive Christmas spending, and it is estimated that overall debt in the UK will rise as a result.
Reports show that on average people in the UK are racking up additional debt equating to £8.5 billion each and every year. The average amount that Brits spend on Christmas each and every year is particularly high, with the estimated amount spent on just presents alone being around £342. This can end up people getting into a cycle of never ending debt, or spending the rest of the following year trying to pay off the debts they have accumulated during the festive season.
According to research conducted by the Money Advice Trust charity, around 13% surveyed said that they regularly are worried about how they are going to afford Christmas. Furthermore, debt charities have stated that they find that they see a surge in help around the start of the new year, calling and seeking for debt help.
In order to facilitate this spending, many turn to high cost lenders. In the same study, over 37% stated that they put their previous Christmas on credit. Many people are also making a number of sacrifices in order to facilitate the perfect Christmas. In the Disposable Income Index (DII) for 2017 by ISA provider Scottish Friendly, revealed that over six in ten households made sacrifices to buy presents at Christmas. 31% of those with children said they had paid for Christmas on credit.
Overall, it was those with children who felt the pinch most at Christmas. In comparison, just 45% of those without children had made financial sacrifices for the Christmas season.
Among millenials, around half said they felt stressed about creating the perfect Christmas, with three quarters of them admitting having made financial sacrifices in order to get presents for loved ones. About 14 percent of those millennials said they intended to take out instant payday loans and fast personal loans, so that they could buy Christmas presents.