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2.5 million plan to seek advice about money, as Christmas overspending bites PDF Print E-mail
Monday, 04 January 2016

More than 2.5 million Britons are likely to seek advice about tackling their debts or managing money a result of Christmas spending, according to new research from National Debtline, the free advice service run by the Money Advice Trust.


Nearly one in eight Britons (12 percent) surveyed by YouGov for National Debtline said they were likely to fall behind on their finances in January as a result of Christmas spending, equating to an estimated 5.7 million people. Almost half this number, five percent or an estimated 2.5 million, said they are likely to seek advice on tackling their debts or managing their money as a result of Christmas spending – up from an estimated 1.9 million last year.

The concerns follow a Christmas that many households put on credit. Research by National Debtline last month showed that more than a third of Britons (35 percent) were borrowing to pay for presents and nearly a quarter (23 percent) to pay for food, an increase on the previous year. Nearly one in four Britons (23 percent) felt under pressure to overspend in the run-up to Christmas, which the charity is concerned will result in a “financial hangover” for many.

National Debtline saw a 61 percent jump in calls after last Christmas as households came to terms with festive overspending, and early signs suggest this increase is likely to be surpassed this year. This year, 215 people went through online advice sessions from National Debtline as early as Boxing Day, compared to 157 people on Boxing Day 2014 and just 45 the year before.

While more people are starting the year likely to seek advice of some kind, however, the charity is concerned that many will turn to fee-charging commercial debt management companies rather than free independent advice agencies – and that many more will not seek expert advice at all.

On a more positive note, the research also suggests that many households are aiming to start 2016 in the savings habit, with almost a quarter of Britons (24 percent) planning to start saving earlier for Christmas than last year, equating to an estimated 12 million people – up slightly from 11 million people (23 percent) in 2015.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “Most of us find the New Year a difficult time financially, and we know that this year tens of millions of people are starting 2016 having put Christmas on credit. Many households are now facing a financial hangover as a result.

“National Debtline always has a busy January when credit card and other bills begin to land – and we expect demand to be even higher this month than in previous years. The fact that so many people went online for an advice session straight away on Boxing Day tells its own story.

“Households should be careful in making sure they start 2016 off on the right foot. Our message to anyone struggling to cope with their finances is to take action to deal with the problem straight way. Set a monthly budget, open all of your statements and get a handle on how much you owe – and crucially, contact a charity-run service like National Debtline as soon as possible.

“The earlier you take action to get back in control of your finances, the quicker you can get on with enjoying 2016 without worrying about them. Seeking advice from National Debtline now could turn out to be the best decision you make all year.”

On fee-charging debt management companies, Joanna Elson added: “I would also strongly advise against turning to fee-charging debt management companies. Ultimately, these firms exist to make a profit out of your situation, and the high fees they charge will only add to your debt burden. Instead, charity-run services like National Debtline, Citizens Advice and StepChange can be trusted to always give you free, expert, independent advice based solely on what is in your best interests.”
 
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