Almost one in three people living across Britain will rely on some form of borrowing to cover the costs of Christmas.
That’s according to research carried out by the debt help charity StepChange, which reveals that roughly two thirds of people will struggle to afford their Christmas spending this year.
The charity’s figures suggest that some 70 per cent of consumers will not be able to comfortably afford the costs of Christmas, while 25 per cent plan to use ‘buy now, pay later’ schemes to spread their spending.
On average, those people who borrow to cover their Christmas costs will take roughly seven and a half months to pay back the debts they accrue over the festive period.
Young adults, meaning those aged between 16 and 34, were found to be considerably more likely to use a ‘buy now, pay later’ schemes than those in older age brackets.
For StepChange, the figures on younger people using debts to pay for Christmas are worrying in part because insecure work and irregular incomes tend to be more common among younger adults, which could mean they will find it harder to pay off any debts they take on.
Perhaps predictably, buying presents for family and friends, and buying food and drinks for the festive period, are among the main sources of expenditure that people need to cover in advance of and during Christmas.
StepChange says that a third of people cut their spending to save up for Christmas but for parents with dependent children, the costs involved can be particularly tough to bear.
The charity is urging anyone worried about their finances around the end of the year to think carefully about how they manage their money because debts taken on can very easily linger long into the new year.
“Celebrating the festive season is fun but getting into debt for it isn’t,” says Richard Lane, director of external affairs at StepChange.
“If it’s going to take many months to repay what you borrow to pay for Christmas, it’s worth pausing for a moment to think about whether your friends and family would really want you to suffer financially as a result of your generosity.
“Most people would much prefer their loved ones to have a financially happy new year than a swanky present.”
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The emergency £20 increase to Universal Credit payments introduced in response to the Covid pandemic could be taken away from prospective recipients from April next year.
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