One in three households will struggle to afford Christmas

New YouGov polling commissioned by StepChange Debt Charity, which explores people’s finances and borrowing habits, reveals that one in four people will struggle to afford Christmas this year, rising to more than one in three (34%) households with children.

The survey also found that. one in twelve (8%), around 4 million people, will be relying on credit to cover costs this Christmas. A further one in four (27%) say they will have to cut back on their normal expenses to afford Christmas. A further 2%, around 1m people, say they will not celebrate Christmas at all due to cost.

Meanwehile one in five (19%) of those intending to borrow expect it’ll take them more than a year to repay the credit and over two in five (45%) said their borrowing this year would be higher than during Christmas 2022.

Those who are relying on credit to fund their Christmas this year overwhelmingly say this is due to the higher cost of living, with three in four citing this (75%) as their reason for needing to borrow.

StepChange has seen first-hand the impact that two years of cost of living pressures have had on household budgets, and while inflation may have slowed, prices for everyday goods remain much higher than they were just a couple of years ago and finances will still be stretched this festive season for many. The charity is urging people to reach out for support if they’re worried about their finances this Christmas.

Vikki Brownridge, CEO at StepChange Debt Charity, said “People, especially those with children, understandably feel pressured around Christmas time to spend money to create special moments and memories with their loved ones. However, this pressure, can often encourage people to spend more than they can afford, and turn to credit to cover these costs.”

“Against a backdrop of almost two years of high inflation, it’s very likely that relying too heavily on credit at Christmas could lead to debt problems in the New Year. At StepChange, we see some of our busiest days during January each year, with last January being our busiest month for several years.”

“We would urge those who are thinking about borrowing to cover festive costs to always carefully consider whether those credit repayments will be comfortably affordable when the New Year comes around. Many adverts around this time of year imply that spending is the way to create a happy Christmas, but in reality people would prefer their loved ones to be free from financial worries and problem debt in the New Year. If you are struggling with debt, now or in January and beyond, it’s never too soon to reach out for help. Free debt advice and support is available from charities like StepChange.”