Financially Savvy Brits: 28% more people in the UK to pay off Christmas debt by Feb, compared to last year
In November, two thirds of Brits (64%) admitted to prioritising their money management this Christmas, but did the UK become more money-conscious in 2023 compared to the previous festivities?
Following on from their previous Christmas finance report, credit management company Lowell has conducted further research[1] into the impact the festive season has had on UK household finances going into 2024.
2022 saw the peak of the cost-of living crisis, with interest rates reaching an 11.1% 41-year high[2], and with a quarter of Brits (25%) opting to use credit cards, and one in ten (12%) choosing buy now pay later schemes, people in the UK were facing the challenge of paying off their Christmas 2022 debt as late as Easter 2023.
However, as people planned to prioritise their money management this Christmas, overall credit card and buy now pay later scheme usage collectively decreased by 13%. Furthermore, there is a substantial 50% reduction in Brits resorting to their overdrafts. Additionally, 14% more individuals successfully budgeted their disposable income for the festive season, rather than accruing extra debt.
Encouragingly, 28% more people think they will have any Christmas debt paid off by the end of February, a notable increase from the previous year.
To further assist Brits in preparing their finances for the new year, Lowell advises the following:
Prioritise reducing debt – before trying to save any money, prioritise clearing off any credit card or overdraft payments with a realistic and affordable payment plan to avoid excess repayment fees.
Plan in advance – If you have any key dates in the diary for 2024 such as birthdays, holidays or weddings, start to put money away in advance to avoid overspending closer to the event. Be sure to save within your means and be realistic with how much you put away, so you still have enough disposable income for bills and monthly essentials.
Be organised with a budget – Create a spreadsheet that lists all of your monthly outgoings, from mortgage or rent payments, to streaming subscriptions. Also include a rough estimate of essential payments such as food and petrol, to give yourself an accurate idea of how much budget you have remaining for saving and any loan repayments.
Long-term goals – Whether you’re looking to move to a new home, are saving to have a child or booking a dream holiday, have a clear vision of your long-term goals and how you can achieve them. Utilise your budget spreadsheet and see what you can afford to save in a 12-month period.
John Pears, UK CEO of Lowell UK said “It’s clear to see that people made a conscious effort to spend within their means as much as they possibly could this Christmas.
