Millions expected to turn to payday loans to afford Christmas
December 9, 2013
The festive season is in full swing and as consumers begin their Christmas shopping, it’s expected that many will turn to credit in order to afford that perfect gift.
The Money Advice Service’s annual Christmas spending survey revealed that around 16 million people will use credit cards to pay for the cost of Christmas this year, with over 1 million people taking out a payday loan.
According to the figures, one in ten UK adults are still paying for the cost of last year’s festivities, and 38% of adults said they were “worrying” about how they will afford Christmas this year. Around 17 million UK adults believe that they will start the New Year in post-Christmas debt.
If you find it difficult to avoid getting carried away during the Christmas period, you’re one of many. Around 27% (more than a quarter) of UK adults admitted to spending more than they could afford on Christmas, and 39% said they pushed their finances to the limit.
Christmas is primarily a time to enjoy the company of friends and family. However, over the years, the commercial nature of the holiday has meant it’s easy to feel pressured into spending more than necessary. Inability to budget and pressure to please loved ones, were just two of the top five reasons for overspending at Christmas.
Head of service delivery at the Money Advice Service, Jane Symonds, said; “Getting to grips with the cost [of Christmas] in advance of the big day will help you take control of your spending and alleviate some of the pressure.”
In an interview with the Daily Record, Scottish politician, Fergus Ewing, advised on an alternative way to afford Christmas, if people feel it necessary to turn to credit. He said: “We are very conscious that there is a particular temptation at Christmas to spend more than one can afford and for those who face financial problems the temptation may be to go to payday loan companies.”
He added: “This type of loan can get people into serious financial trouble with interest rates of up to 5,000% and costs spiralling out of control if the loan is not repaid quickly. We want to say there is an alternative – joining a credit union.”
Around 350,000 Scots are members of a credit union (a member-owned, financial co-operative which is controlled by its members). Joining a credit union in the run up to Christmas could offer you access to extra funds without the high interest rates of a payday lender.
If you’re considering any type of credit to cover the cost of Christmas this year, why not speak to our knowledgeable team at Scotland Debt Solutions for more information on how to join a credit union or other suitable debt solutions. Our experts can help you get the best out of your financial situation and enjoy the festive season whilst keeping your spending under control.
When taking out a joint loan, there are many things you need to consider. Signing up to a joint credit agreement is a huge commitment and it’s important to ensure you have all the facts before signing on the dotted line. While no one wants to think about a relationship breaking down, the truth is […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
A trust deed is a common debt repayment programme based around a voluntary arrangement made between you, your creditors and a qualified independent trustee who takes control of your debt repayments for a typical period of four years. If you’re having difficulty paying your debts and have assets or a regular income, you may qualify […]
If you have built up debt from gambling, you may be able to write off part or all of the debt via a formal Scottish insolvency route. Not all insolvency solutions allow debts to be written off, but you may be eligible for a trust deed if you meet certain criteria, with sequestration also being a possibility […]
Her Majesty’s Revenues and Customs (HMRC) is one of the biggest creditors in Scotland, and indeed across the rest of the UK. Millions of people make payments to the government through HMRC in the form of income taxes, National Insurance and VAT every year. For the majority of people in employment, this is done automatically […]
Council tax is a charge levied on residential property and payable to the local council. While some properties are exempt from paying council tax, most households must factor this bill into their monthly budget. Households will be given a yearly charge which can then be broken down into a series of monthly instalments throughout the […]