Credit, Collections & Insolvency News
In the months and weeks leading up to the end of 2023, the UK’s financial numbers give an overview of the difficult landscape being faced and the effects this may have on many people’s Christmas spending plans. According to the Office for Budget Responsibility’s November 2023 forecast, household debt of all types is forecast to rise from £2,259 billion in 2023 to £2,429 billion in 2025, making the average total household debt £85,274 (assuming household numbers track ONS population projections.)
Against these levels, 52% of people in the UK report that they will spend less on Christmas this year due to the rising cost of living. Just 3% expect to spend more than usual while about a third (36%) say they will spend the same as they normally do. Separate findings say that the average UK household will spend £1,811.70 on Christmas festivities this year, the equivalent of 80% of the average monthly UK income. 30 years ago the average spend was £229 meaning, adjusted for inflation, the ‘cost of Christmas’ has risen 290% in three decades.
Meanwhile in the year to September 2023, the overall rise in the cost of living amongst the lowest income UK households has been calculated at 8.2%, in comparison to a 6.7% rise in benefits over the same period. Private rental prices in the UK rose by 6.1% in the 12 months to October 2023, up from a revised 5.7% for the 12 months to September 2023. The estimated average outstanding mortgage, for the 10.77 million households with mortgage debt, was £151,076 as of October 2023.
It isn’t surprising that, after a year typified by ongoing cost of living challenges, this would have its own effect in turn on people’s Christmas. Many will be having to carefully consider their choices, looking at what to perhaps forego or where savings can be made. Others may choose different routes, such as taking on more heavy or unsustainable debt in order to ‘afford’ the Christmas they want.
While this picture has brought little festive cheer, some comfort can be taken at least from the direction of travel with some of the UK’s financial figures, with small shoots of improvement possibly on the way heading into the new year. With that in mind, we look expectantly towards 2024 as a year where we will see more consistently positive news for the UK’s Financial Wellbeing. With our sessions continuing to engage many thousands of people of all ages with Financial Education and Financial Wellbeing, we’ll keep playing our vital role in seeing a healthier financial future for everyone.
