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|One in three Brits don’t know how they would pay for Christmas if they didn’t incur debt|
|Thursday, 03 December 2015|
Brits have been found to rely heavily on going into debt during the festive season, with one in three (31 per cent) consumers admitting to not knowing how they would pay for Christmas without incurring debt, a new study by financial technology company Intelligent Environments shows.
The festive season is known for shopping, and 44 per cent of consumers have stated they will go into debt to pay for this year’s Christmas presents. Additionally, a quarter (26 per cent) believe they will miss at least one repayment and incur a late fee this Christmas.
Christmas can be a stressful time as it is, and debt can compound the strain. Half (50 per cent) of Brits have said that going into debt is one of the biggest causes of stress at Christmas.
Enabling consumers to manage their finances digitally has been found to be one way to relieve this stress. According to Intelligent Environments’ research, 59 per cent of people would like to manage their finances online, and 54 per cent say they would repay larger amounts of their debt if their bank provided them with a financial management tool that was linked to their bank account.
In light of this, Intelligent Environments is calling for more banks to give their customers easier access to digital budgeting tools in a bid to prevent people going into debt. The company believes making money management easier throughout the year could make peak spending times such as Christmas more manageable. Therefore, banks need to equip customers with more accessible and user-friendly tools to manage their money online in a quick, easy and transparent way.
David Webber, Managing Director of Intelligent Environments, said: “Our research shows us that nearly half the UK population estimates they will go into debt to pay for Christmas this year. This is a figure which could be dramatically reduced if banking customers were given advice, training and access to money management tools. Regulated by the FCA, banks are required to put customers first as part of their business strategy. This means that if evidence shows that customers need assistance with personal financial management, banks should strive to provide it.
“Customers need to be given more transparency and structure on the management of their finances. This will enable them to manage their money better, ultimately cutting down on the level of debt that currently exists, hopefully providing them with skills to prevent them from going into the red in the future. We live in an increasingly digital world, and banks need to ensure their customers have access to the tools they need to manage their money in a quick, easy and stress-free way.”
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