Insolvency Expert Comments On Research
One in 20 (5%) of people in Yorkshire said they have already borrowed money to pay for Christmas, according to a recent survey by insolvency trade body, R3.
The research shows that of those people who have already borrowed money from a bank, credit card provider, family, friends or other lender, to cover the cost of Christmas, a quarter of people in the region do not expect to be able to repay the debt within a month. In Yorkshire, 5% thought they would not have enough money left over to comfortably pay bills at the end of December although this was more positive than the 13% across the UK who thought they would not be able to afford their bills after paying for Christmas.
Andrew Walker, chair of R3 in Yorkshire and partner at Irwin Mitchell, comments: “The recent pick up in retail sales figures indicates that people have started their Christmas shopping early this year, and this is a wise choice. Given the ever increasing cost of living, particularly the hike in energy prices, spreading the cost of Christmas across a few pay cheques is sensible.
“However, there are still huge numbers of people who will struggle to afford Christmas and may well look to short-term loans and credit cards. They should be wary of the high interest rates that often accompany these products, as this will leave them lumbered with Christmas debt long into next year. I would advise anyone struggling with their finances around the Christmas period to seek the advice of a professional as soon as they can.”
The survey also showed some worrying national trends with 16-24 year olds being more likely to have borrowed money than any other group, with around one fifth (18%) already in Christmas debt, compared to 4% of over 65s. These figures are down slightly from 21% of young people and 6% of over 65s having borrowed money in the lead up to Christmas last year.
Walker added: “It’s worrying to see that the 16-24s are developing bad money management skills so early on. Fewer people than last year, across the board, have borrowed money but there are still some weeks until Christmas. With unemployment figures up, we can only expect to see more people saying they are struggling to afford the demands of the festive season.”