Tackling your debts

Millions of us are still paying for last Christmas

Posted 18 November 2016

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Over 11 million people are still paying for last Christmas.

It’s mid-November and Christmas is just around the corner, but are you still feeling the financial cost of last Christmas? According to new research carried out for Debt Advisory Centre, over 11 million people in the UK are still struggling to repay credit they took out to cover the cost of Christmas 2015.

The average amount still owed to lenders is £517, which indicates that a massive 6 billion is outstanding in Christmas debt. For 1 in 5 people however, the debt is even higher and they need to pay back over £1,000 to their lenders.

Those who borrowed will have to find a way to pay back what they owe from last year and budget for Christmas this year as well. For some, this will be impossible without borrowing more – 13% of people questioned said that they intend to borrow for this Christmas as well.

When you break the figures down in terms of age, there is a difference in which age groups borrowed the most. Perhaps unsurprisingly, the under 35s are most likely to have borrowed to pay for last Christmas. 53% of 18-24s and 59% 25-34s, confirmed that they couldn’t fund the day themselves. The same age groups had the most problems repaying the debt as well, with 24% of 18-24s and 36% of 25-34 saying they still have something left to pay.

If you contrast this with the 64% of people over the age of 55 who said they didn’t have to borrow anything to fund last Christmas, the gap between the older and younger groups becomes clear.

It seems that borrowing to fund the festive season is not unusual, as 46% of people overall said that had borrowed for last Christmas. Half of those people have now cleared the debt, but millions of people haven’t been able to yet. This means that, for a large number of people, debt from last year is still hanging over their heads.

What should you do if you’re struggling with repayments?

If you’re living month-to-month and just making ends meet, Christmas is a huge added expense and it’s not hard to see why it can force some people to borrow. Many people face the prospect of not being able to celebrate Christmas themselves or buy presents for loved ones, unless they borrow the money.

However, as with any borrowing, caution should be exercised to make sure you don’t end up committed to repayments that you simply can’t afford. A balance has to be struck between enjoying Christmas and making sure that you don’t jeopardise your financial security for the rest of the year. If there’s no room in your budget for Christmas itself, will there be room to make your repayments in the New Year? And if you’re not sure how you’re going to repay your debts from last Christmas, it’s not a good idea to borrow more for this year – this will only make things harder for you in the long run.

January and February are the busiest months for debt advisors, as people try to tackle their debts in the wake of Christmas. If you are saddled with debt from last year that you can’t afford, the best thing to do is get expert help and there’s lots of free and impartial advice available.

It’s also important to keep in communication with your creditors. Don’t be afraid of calling them to explain you’re having trouble making your repayments. They have an obligation to treat you fairly and might be able to put a plan in place to suspend your payments, lower them, or freeze interest and charges.

Battling problem debt can be a very draining experience, and Christmas time can make it even harder, as you’re surrounded by reminders that you’re expected to spend more at this time of year. But there is always a way to deal with debts that have become a problem.

You can get in touch with one of our advisors for free using the options at the bottom of the page. They can talk to you about various solutions that might be able to lower your repayments and make them affordable.

by Christine Walsh

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