- Over seven per cent of UK adults will be pushed into debt as a result of Christmas spending
- 40 per cent of UK adults will carry existing debt into the festive period
Consumers were asked whether they currently carried debt (excluding outstanding mortgage and student loan repayments) and whether they could fund Christmas without going into the red.
Of those who revealed they would be pushed into debt by the cost of Christmas, 69 per cent would be spending on a credit card, 23 per cent would be using their overdraft and eight per cent would be taking out a loan to tide them over.
Tim Moss, head of loans and debt at moneysupermarket.com, said: "We know times are incredibly tough for consumers and it's no surprise to see such a high number of people will be pushed into debt this Christmas. Preparation is crucial and those who have saved will be able to start the New Year without the burden of debt hanging over them, however if saving is not an option, there are other steps consumers can take to lessen the impact of the festive season.
"For those needing to borrow funds, a credit card offering zero per cent interest on purchases might be the cheapest option provided they are able to pay off the balance in full within the promotional period. However, consumers opting for this route should avoid the temptation to spread the cost over a longer term or they will be still paying for this Christmas going into next year's festivities."
Interestingly, the South East is the region where consumers are most likely to fall into financial trouble, with around one in five (18 per cent) debt free consumers expecting Christmas to push them into the red. Scotland fares the best, with under one in ten (nine per cent) expected to need extra funds to cover the cost of Christmas.
A staggering 19.6 million** UK adults are currently carrying debt (40 per cent) and will go into the festive period with their finances already severely strained. This means that when added to those about to go into debt, over 23 million consumers, or 47 per cent of the UK adult population***, will find themselves in arrears by the beginning of 2011.
Brits focus on their finances
In addition, a survey of almost 4,000 people on moneysupermarket.com**** examined the attitude of the UK public towards their finances by asking if they could save £1,000 between now and Christmas, what would they spend it on? Almost three quarters (73 per cent) of respondents would use the money to shore up their finances by paying off debts, save it or invest the money.
Tim Moss continued: "Our research shows that almost 20 million consumers will be heading into the most financially stressful period of the year already in debt and there is clearly concern among the general public about the state of their finances. The fact the vast majority of Brits would use a £1,000 windfall to balance their books says a lot about the mood of the nation when it comes to money.
"With Christmas around the corner and household budgets at breaking point, clearing debt can seem like an impossible task; however there are some very straightforward steps consumers can take to get their finances back in order. Ultimately in this bleak economic climate, consumers need to be savvier about how they spend, save and borrow money. A little research can also go along way and Brits need to ensure they are starting 2011 with the best possible rates across all their financial products."
- Ends -
Notes to editors:
Opinium Research carried out an online poll of 2726 British adults from 6th to 9th November
2010. Results have been weighted to nationally representative criteria and based on a UK adult population of 49,121,000
* based on 13% of those who expected to be in debt from all those who were currently not in debt (60 per cent of the base scaled up to 49,121,000)
** 40 per cent of 49,121,000
*** 3.8 million plus 19.6 million expressed as a percentage of UK adult population
****Poll ran on www.moneysupermarket.com from 11 November to 18 November, based on 3,843 responses.
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