Quarter of consumers expect to pay off Christmas debt by February

New research by Lowell has found that over a quarter (28%) more people think they will have any Christmas debt paid off by the end of February when compared to last year.

The research also found that 14% more consumers were able to rely on their disposable income for Christmas 2023, compared to the previous year. Meanwhile 13% less people used credit cards or buy now pay later schemes for their Christmas spending compared to Christmas 2022

In November, two thirds of Brits (64%) admitted to prioritising their money management this Christmas.

Lowell says that 2022 saw the peak of the cost-of living crisis, with interest rates reaching an 11.1% 41-year high and with a quarter of cosnumers (25%) opting to use credit cards, and one in ten (12%) choosing buy now pay later schemes, people in the UK were facing the challenge of paying off their Christmas 2022 debt as late as Easter 2023.

However, as people planned to prioritise their money management this Christmas, overall credit card and buy now pay later scheme usage collectively decreased by 13%. Furthermore, there is a substantial 50% reduction in consumers resorting to their overdrafts. Additionally, 14% more individuals successfully budgeted their disposable income for the festive season, rather than accruing extra debt.

John Pears, UK CEO of Lowell UK said “It’s clear to see that people made a conscious effort to spend within their means as much as they possibly could this Christmas.

Following a turbulent year marked by the cost-of-living crisis and ever-growing inflation rates, Brits have opted to scale back their festive spending, aiming to position themselves more favourably for the upcoming year.

Opting for disposable income instead of credit cards or buy now pay later schemes is a positive step forward, and we’d want to emphasise anyone feeling financial pressure should not hesitate to reach out for support.”