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Christmas / New Year Season Debt report
Total UK spending on cards, cash and cheques is predicted to reach £51.6 billion during December 2006. Festive spending on plastic is set to reach £31.8 billion (which is an 11.6% increase on December 2005). This equates to an average spend on plastic cards in December 2006 of £1,287 per household (£462 on credit cards and £825 on debit cards).
One third of the UK take themselves into a
position of debt every Christmas
According to research by Cornhill Direct a third of people go into debt every Christmas in a bid to make it the best year ever. A fifth of people say they are often still trying to break even by the following March and one in 10 are still in debt by the next Christmas.
Research from Alliance & Leicester Personal Loans has revealed that a staggering 23% of people have used store cards to help pay towards their Christmas spending. Of these over half use store cards simply because they were offered them at the point of purchase. This is despite some eye-watering interest rates which can easily make the effects of those festive purchases last much longer than the Christmas hangover.
It is estimated that in the first three months of 2007
there will be in excess of 30,000 personal insolvencies
Grant Thornton estimates that there will be 30,000 personal insolvencies in the first three months of 2007, of which 10,000 will be as a result of excessive Christmas Spending.
Christmas is the most significant event in the UK's retail calendar with many outlets making up to 60% of their annual turnover between November and January.
This year in the 10 weeks to Christmas some 25 million people are expected to spend £7bn online - £4m every hour day and night. UK internet retail sales reached £3 billion in a month for the first time in November
What do you spend your money on at christmas?
During the festive season we plan to spend £863 overall on presents, wrapping paper,
cards, decorations, going out, food and drink. This includes £378 on presents, £163 on
food and drink. The rest is spent on wrapping paper, cards and postage (£53); Christmas tree
and decorations (£64); socialising (£121) and travel (£84).
According to Experian three in four Britons admit to worrying about financial pressures during the festive season. The festive season is turning into ‘Stressmas’ as 20% of us are still paying off our Christmas up to six months later.
Whilst the celebrations and partying may be over in a few weeks a report from Virgin Credit Card found Brits take an average of three months to pay off the £13 billion festive celebrations bill they rack up each year, meaning the 12 days of Christmas in reality lasts 12 weeks.
Xmas is now known as ‘Stressmas’ as 20% of the UK population are
still paying for Christmas upto 6 months later
Between September and November each year lenders send out at least 100m unsolicited, but pre-approved credit card application forms. New cards achieve “top of the wallet” status: they are the most used cards and the most lucrative for lenders.
According to the British Retail Consortium the average family accumulates 18% of their annual borrowing in December by spending twice as much than in any other month of the year
Record numbers of people called debt advisory services in January 2006 after finding they were struggling to pay back what they owe. The Consumer Credit Counselling Service took 9,310 calls in the first nine working days of the year - up almost 14% on the same period in 2005. National Debtline also reported huge demand, receiving almost 13,000 calls between January 3 and lunchtime on Friday.
Record numbers of people telephoned bt advisory services susch as Finance Inc in January last year. It became apparent to them that they were unable to repay the large sums of debt they had accumulated during the Christmas period.
Data Courtesy of Credit Action
Other Similar items of interest
View personal debt statistics for January 2007 (click here)
Britains Servicing Debt (click here)
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