Two in three UK households (66%) expect to return to their normal financial state within three months after Christmas, research from Ferratum Group, a global provider of mobile financial services has revealed. In last year’s Winter Barometer, this figure was just 44%.
The Ferratum Winter Barometer, conducted in November 2019, surveyed over 31,000 households across 14 countries, including the UK, about their spending habits over Christmas. The survey revealed that 34% of UK households expect to pay off all of their Christmas loans or credit purchases within three months, with nearly the same number (32%) saying that it will take two months or less. Just one in 10 households (10%) say that they will still be paying off their Christmas purchases after six months.
Commenting on the findings, Tony Gundersen Ferratum UK Country Manager, said: “A fall in real wages and continuing economic uncertainty is bound to have an impact on people’s finances, so it’s no surprise that families in the UK are using credit and loans to extend the payment window for their Christmas purchases. However, it’s encouraging to see that most people are using these options over the short term and have a clear plan to repay them. When used in this way, loans and credit cards can take a lot of the stress out of the holidays by spreading the cost over a more manageable period.”
The 2019 Ferratum Winter Barometer also shows that nearly half of UK households (45%) are planning to finance their Christmas spending with savings, up from 44% in 2018, and 41% in 2017. Others expect to fund their purchases with consumer credit, credit cards and loans.
Other key findings included:
- Gift cards remain a popular present, with 22% of UK households listing these amongst the biggest expenses over Christmas
- Shopping (58%), toys and games (44%) and winter clothing and fashion (34%) were identified as the top three Christmas expenses in the UK
- 15% of UK households expect to spend between £401-£500 during the Christmas holidays, with a similar number (14%) setting a budget between £1,000-£2,000
Across all of the countries surveyed, 20% of families said they are planning to increase their spending during the Christmas holidays this year compared to last year. In the UK, this number was slightly smaller (17%), with nearly four in 10 (37%) saying they plan to spend less.
Tony Gundersen Ferratum UK Country Manager, concludes: “It’s interesting to see that so many UK families are planning to spend less this Christmas than they did last year. It is important for people to take a responsible approach to spending, just as it is with borrowing. People often get carried away at this time of year when it comes to spending, so families will need to keep a close eye on their finances, decide exactly how much money they need, and then repay any borrowing as quickly as possible.”