One in eight Britons face Christmas financial hangover
One in eight Britons could struggle to make ends meet this month after spending more than they could afford over Christmas, a charity has warned today.
The Money Advice Trust said more than 12 per cent of the 2,000 people polled expected their finances to slip back in January as a result of their spending over the festive period.
The survey comes as official figures published yesterday show new personal debt in the UK soared to its highest level in more than six years in November.
Consumer credit – which is made up of people’s borrowing on credit cards, loans and overdrafts – saw its strongest increase since early 2008 in the run-up to Christmas as shoppers took advantage of store promotions, according to the Office for National Statistics.
Consumer credit increased by £1.3billion in November, which is higher than the average monthly increase of £1billion seen over the previous six months and the largest upswing seen since a £1.4billion increase in February 2008.
Howard Archer said the surge in consumers snapping up items on Black Friday ‘likely contributed to the high borrowing levels’.
‘Relatively high consumer confidence means that people have become more prepared to borrow in recent months,’ he said.
But the Money Advice Trust said that despite one in eight people expected to struggle with their finances, only one in 100 said they were ‘very likely’ to ask for help with managing their money and tackling debt.
The charity, which runs the National Debtline, fears that many households will leave it too late and see their financial position deteriorate further in the new year.
Joanna Elson, chief executive of the Money Advice Trust, said: ‘Our New Year message is simple. If you are dreading the arrival of that first credit card bill in a couple of weeks, now is the time to act.
‘Set a budget by working out how much you have coming in and how much you need to spend each month, and open all of your statements to get a handle on how much you owe.’
Other recent surveys seem to point towards an increase in the amount of personal debt.
Twice as many people fear their finances will worsen this year as those who believe they will improve, according to the latest Aviva Family Finances report.
Families currently have £16,300 of debt outstanding, excluding mortgages, compared to £7,840 six months ago, with much of this sum on credit cards.
Six months ago, the average credit card debt was £1,720, now it is £2,940, according to the study.
Families also owe more on personal loans, up from £1,210 to £2,090, while the amount owed to payday lenders has more than tripled from £350 to £1,290.
Here is a link to the ‘This Is Money’ Article we refer to: