Christmas on credit: Families need to borrow to pay for presents

Published by Adam Williams on 14 December 2017.
Last updated on 14 December 2017

Christmas on credit: Families need to borrow to pay for presents

A growing number of families are relying on credit cards and personal loans to pay for the cost of Christmas.

A report by Scottish Friendly and the Social Market Foundation found that 31% of families are relying on credit to pay for Christmas presents this year.

The provider says many people feel pressured into spending money by family, friends and television advertising.

Some 56% of households say they are having to make sacrifices – such as delaying paying household bills – to pay for Christmas. This figure rises to 76% in households with children.

The average consumer will spend £342 on Christmas presents this year with £303 of that figure going on credit cards, and paying off this debt will take off several months, according to the Social Market Foundation.

The average UK household will take until April 2018 to pay off the debts they have accrued over the Christmas period, the research suggests.

Worryingly, a separate study by Scottish Widows and The Centre for the Modern Family reported earlier this month that four in 10 (43%) of grandparents are cutting down on essentials to help their families finance Christmas.  

Calum Bennie, savings expert at Scottish Friendly, says: “Christmas is a time for giving and it seems that spirit is alive and well in Britain in 2017. However, our report shows that the season of goodwill is putting significant social and financial pressures on us.

“Family, friends, TV advertising, retailers and social media are all combining to push us even harder in pursuit of a ‘perfect’ Christmas and in many cases that pressure is having a detrimental financial impact.”

A separate report published by Halifax earlier this year found that one-in-five (18%) people plan on spending more on Christmas this year than they did in 2016.

Read more about shopping on Moneywise

 

 

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