Almost half (44%) of Brits overspend in pursuit of creating the perfect Christmas for family and friends, according to new research from TSB. Driven by pressure to appease loved ones, more than half (54%) of Brits don’t even set themselves a budget for their Christmas spending. In some cases this has included forking out on gifts including designer puppies at £500 a pop, ponies and a houseful of new carpets for the in-laws.
Peer pressure is also responsible for loosening purse strings as more than one in 10 (12%) admit that they overspend to ‘keep up with the Jones’s’, even if they can’t afford to.
With one in 10 admitting to living beyond their means at Christmas, it’s unsurprising that many shoppers are planning a ‘Christmas on credit’ this year. In preparation for their splurges, 7% of Brits would sooner get into debt than consider reducing their festive spending and 12% are planning to take a ‘buy now, pay later’ attitude.
Almost a third (31%) of Christmas shoppers will make formal arrangements to borrow money specifically to cover the costs of Christmas. Using a new or existing credit card is the most popular choice with almost a fifth (19%) planning to pick up the plastic, followed by overdraft extensions (5%) and taking out personal loans (3%).
While the majority of spenders expect to have repaid any extra debt they took on to cover the costs of Christmas within one month, 13% think it will take them up to three months, while 1% expect to be paying the price until the following Christmas.
However, Christmas spending isn’t only hurting pockets, it’s also causing some people to feel anxious (36%), under pressure (27%), worried (26%) or guilty (21%). A fifth (19%), on the other hand, feel ‘nothing at all’ when they spend too much.
To help ease the potential burden of Christmas, TSB is partnering with TV psychologist Corinne Sweet, to help shoppers pause and think before stuffing their Christmas stockings with unnecessary gifts, while also knowing the options available to them when it comes to getting in control of their finances and debts.
Corinne commented: “Psychologically-speaking, the ‘urge to splurge’ is very tempting, especially at this time of year, and when you want to make your loved ones feel you care. No-one wants to be a ‘scrooge’ but, the financial headache that follows when the bills come in during the New Year, can kill the delight of giving too much. There is often a pull to go with the latest trend, to keep up with friends and family, or to ‘buy love’ at Christmas. Sadly, this seldom lasts. Far better to make an effort to give thoughtfully, not least if you are someone who likes to splash out. You can end up feeling disappointed (and grumpy) when your generosity is not reciprocated. Try making a budget, and also being creative and thoughtful about presents. Spending time with a loved one can be even better than spending money – so be more watchful of your urge to splurge and you may stop yourself having nasty surprises in the New Year.”
Nick Smith, Head of Personal Loans at TSB, says: “For many people, Christmas is a time to be merry and celebrate with loved ones, so it’s unsurprising that many people feel the pressure to make it a success. As we all know, it’s only too easy to get carried away when it comes to Christmas shopping and even the best intended budgets can soon fly out of the window.
“It’s encouraging to see that many of those taking on debt to cover the costs of Christmas do so for just a short period, but it can easily become a burden to pay off – particularly if borrowers don’t know their interest rate.