Millions of Britons are set to borrow money this year - whether this be through credit and store cards or personal loans - to fund their spending in the run-up to Christmas, an industry expert has asserted.
Susan Hannums, savings manager for AWD Chase de Vere, claimed that borrowing money to finance the festive season is becoming a more popular option for consumers as many look towards using plastic cards, loans and other forms of borrowing to help them manage their spending. However, Ms Hannums suggested that consumers could well find themselves coming under further financial pressure this Christmas as mortgage costs have increased due to the impact of the five interest rate increases carried out by the Bank of England's monetary policy committee since August last year.
In addition, she pointed out that spending during the festive season is also due to rise, with the cost of presents and food some of the financial demands people may wish to meet by applying for a loan.
Ms Hannums added that the high level of those struggling to handle their finances and filing for insolvency in the aftermath of the Christmas and new year period "is a big concern". The savings manager also reported that the start of January is often "a very worrying time" for those looking to get their spending under control.
She said: "I think that we definitely have had way too many years of relying on credit and Christmas is one of those incredibly expensive times of the year. It kind of goes without saying - credit has become so acceptable and so the norm that there is definitely going to be a huge amount of people who will depend on it for the Christmas season."
Although she reported that it "now is a little bit too late" to begin saving for this Christmas, those who are concerned about the pressure the upcoming festive period will put on their ability to meet demands for payment on personal loans, utility bills and other areas of their spending could be advised to draw up a budget tracking their outgoings. The savings manager reported that although the festive period can be particularly difficult for those with young children, people "have to really take a step back" and consider whether they can truly afford to buy expensive gifts.
And with the festive season just two months away, those Britons worried that they will not have enough money saved to allow them to fund the Christmas of their dreams may wish to consider taking out a low-rate loan. Meanwhile, research by Britannia shows that more than a third of people aim to borrow, whether this be through a credit card or personal loan, to finance spending during Christmas, with four per cent of such consumers stating that it will take them at least 11 months to finish making repayments. The study also showed that men spend more money over the period, as they splash out some 710 pounds. In comparison, the typical expenditure for women during this period accounts for 537 pounds.
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