Friday, November 21, 2008
Category:
Consolidation
In the midst of the credit crunch, many Brits would appear to be planning a more frugal Christmas this year.
According to new research conducted by CreditExpert.co.uk, over 18 million (39 percent) UK adults are planning to recycle previously received gifts, such as unwanted CDs and toiletries. This marks an increase of 16 percent on last year’s figures.
The current state of the economy would appear to have a lot to answer for, with 53 percent of UK adults revealing that they are subsequently struggling more financially. As a result, 40 percent are not intending to spend as much on this year’s Christmas gifts. The average spend in 2007 was £384 but this figure is set to drop by 22 percent this year to £301. In terms of funding, 12 percent are expecting to pay for the 2008 festivities by attempting to obtain a pay increase or by putting in extra hours at work.
For many, the looming Christmas period is a cause for concern. In fact, 45 per cent admit to being apprehensive about the effect that the additional expense will have on their finances. The research also demonstrated that a considerable number of adults could find themselves sinking into debt or dipping into their savings to cover costs:
- 28 percent say they will be celebrating Christmas as usual and will consider the financial consequences in the New Year.
- 8 percent intend to utilise their credit card for Christmas spending.
- 8 percent plan to finance their Christmas purchases by means of their overdraft facility.
- 23 percent will be using their existing savings.
Jim Hodgkins, Managing Director for CreditExpert.co.uk, commented: "How much we spend this year on Christmas is a concern for many of us and recycling presents might seem like an attractive option. Just be careful you keep a close track of your gifts so you don't end up in the sticky situation of the present landing back in the hands of the person originally giving it - or anyone they know! Whatever you do spend this Christmas, you can improve your finances by remembering the crucial thing is to borrow responsibly. To give yourself the best chance of getting a good deal with a lender, it's important to check your credit report to make sure you have a good credit status."
According to the research, this year the Welsh are most likely to recycle unwanted gifts (48 per cent), compared to those living in the South East (33 percent) and East of England (35 percent). People from Wales are also most likely to fund Christmas by endeavouring to achieve a pay rise or by working additional hours (20 percent), as opposed to just 7 percent of those in the South West of England.
In comparison, Londoners and those living in the South East are most likely to finance their Christmas spending with credit cards (both 20 percent), compared to 14 percent in the West Midlands and 12 percent in Wales.
When it comes to the gender divide, women are intending to be more penny-wise than men this year with 46 percent being far more likely to recycle Christmas presents than men (32 percent). Women are also more likely to afford the cost of Christmas by cutting back in other areas (27 percent), compared to men (18 percent).
Where different generations are concerned, it is most probable that 18-24 year olds will recycle presents (51 percent). 45-54 year olds are the least likely to spend more on Christmas this year than last year (7 percent), in contrast to 23 percent of 25-34 year olds, and 16 percent of 35-44 year olds.
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Those thinking of using credit cards or overdraft facilities to cover the cost of Christmas, may wish to consider consolidating these debts in the new year with a debt
consolidation loan. Repayments can then be spread over a term to suit the borrower. It should however be remembered that repaying borrowing over a longer term may increase overall interest charges.
