Debt fears as Wales reveals the true cost of Christmas

A survey of people in Wales has revealed that eight in ten say Christmas will stretch their finances, with one in three predicting it will affect their ability to pay essential bills such as their rent or mortgage.

The research, by Credit Unions of Wales, also found that 48 percent of respondents claimed not to have a budget in place for Christmas, even though most spend anything between £500 to £2000 over the holiday period.

Claire Savage, policy officer for Credit Unions of Wales said: “This survey shows that spending beyond our means at Christmas is a real problem in Wales, with one in three of us expecting it to impact on our ability to pay the bills that keep a roof over our heads.

“With nearly half of us failing to set a budget for Christmas, we run the risk of over-spending and worrying about it later.

“To highlight the issue, on October 17, International Credit Union Day, staff and volunteers in credit unions across Wales will be setting up their Christmas trees, pulling on their festive jumpers and dishing out mince pies to encourage people to start preparing financially for the big day.”

The survey attracted more than 600 respondents, and the results suggest that the majority of Welsh people – around 84 percent – expect Christmas will stretch their finances.

Although 63 percent saved in advance to pay for presents, food and drink, 59 percent of respondents expected to take out some form of credit to cover the costs. 

Claire added: “The good news is that most people are saving, but for many this is still not enough to fund their expected Christmas spending.

“Thirty-nine percent of those intending to borrow expected to use an overdraft, credit or store card or payday lender to help fund Christmas.

“As credit unions, we don’t believe credit is necessarily bad, but it does need to be manageable, so we would encourage people to compare interest rates, repayment amounts and the length of credit to make an informed decision to avoid spiralling debt.

“Most of all, plan your Christmas spending and stick to a budget that is manageable for you.”

Lee Phillips, Wales Manager at the Money and Pensions Service recommended that people start planning now for their Christmas spending.

She said: “Christmas may seem far away, but in reality, it’s only two or three pay cheques from now. January is one of our busiest times for people seeking debt advice after overspending during the Christmas period, so it’s really important to start planning for the festive season now to avoid facing unmanageable bills next year.

“A good starting point is to look at whether you went overboard last Christmas, and think about how you might decide what really matters this year by setting a budget. You can use the free Christmas budget planner tool on the Money Advice Service website to get an idea of how much you’ll spend and where you can cut back.”

Credit Unions of Wales is an association of the country’s 18 Credit Unions, who work together to improve levels of savings and access to affordable credit for all members of the community.

As ethical saving and loans providers, with no external shareholders, credit unions are able to offer loans at reasonable rates from as little as £50-£15,000.

Survey results in figures

• 606 people completed the survey which was publicised through social media.
• 64% said they saved in advance for Christmas.
• 59% expected to take out some form of credit.
• 84% said that Christmas stretched their finances.
• 33% said that the cost of Christmas affected their ability to pay household bills such as rent and utilities.
• 62% expected to spend the same amount of money as last year.
• 22% expected to spend more than last year.
• 48% have not set a budget for Christmas spending.
• 61% expect to spend £500-£2000, with 11% expecting to spend more than £2000 this Christmas.

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