Sixteen percent of UK adults expect to cover the cost of Christmas this year by borrowing, according to a survey from thinkmoney.
The survey asked people how they intended to pay for festivities such as food and drink, presents, entertainment and going out. It found that 18% of people borrowed to pay for last Christmas, at an average amount of £654. Of this group, just under half (46%) have yet to finish repaying the loan. Twenty-eight percent of those still paying the money back expect to have cleared their debt before Christmas day this year, but 18% don’t.
Clear differences between age groups were highlighted in the findings. People aged 35-44 were the most likely to expect to borrow this Christmas (24%, compared with the average of 16% across all age groups), followed by 25-34 year olds (20%) and 18-24 year olds (19%). People over the age of 65 were the least likely to anticipate borrowing this festive season, with just 4% considering doing so.
As well as age, gender and region appear to affect people’s yuletide borrowing habits. Men appear less likely than women to borrow, but when they do, they’re likely to borrow twice as much: women borrowed an average of £547 last year, compared with £1,000 for men. Regionally, the West Midlands borrowed the most last year; their average borrowing amount was £1,114 - more than double the Welsh average of £510.
Ian Williams from thinkmoney commented on the findings:
“Whilst Christmas is the highlight of the year for many, it can be a worrying time for those who struggle to find the money to cover the food, drink, entertaining and presents that are now traditional.
“Being organised about your finances can make managing a big event like Christmas a lot easier. Budgeting to set a little money aside throughout the year can help prevent the need to borrow money for Christmas. If you do need to borrow, a good budget can also help you identify how much you can realistically afford to pay off each month - to ensure the Christmas debt hangover doesn’t linger too long.”
These findings highlight the importance of good budgeting, and remembering to set money outside throughout the year to cover what is an expensive time for most of us.