More than a quarter of people expect to start 2023 in debt

More than a quarter of people will be seeing in the new year in debt according to new research by Tesco Bank.

The types of debts covered included informal debts such as borrowing from friends or family, as well as credit card spending, overdrafts, loans or buy now pay later spending, On average, people expect that it will take 21 months to pay back what they owe.

Two-fifths (43%) of 18 to 34-year-olds expect to end 2022 with some debt. A third (33%) of people will be in debt because the cost of living crisis has added to their long term debts, the survey indicated.

The bank also looked at how people view debt in the current climate. A third (33%) of people surveyed believe it is very easy to slip into owing money and a similar proportion (31%) think there should be more awareness and support for people who are looking for help with their finances.

For some, debt remains a taboo topic, with 23% saying discussing debt would make them feel shame and embarrassment and 18% say they would never confess to anyone that they were in debt.

Gail Goldie, chief banking officer at Tesco Bank said: “A lot of us will ring in the new year owing money to either friends or family, a bank or payment provider and this means it’s important to look at how that debt is managed.

“Putting realistic plans in place, seeking the support of free and expert advice, distinguishing between the different debts you have, and knowing what you have coming in and going out, will help you feel on top of your finances.

“Depending on your personal circumstances, a debt consolidation loan could be a helpful way to manage your debts, potentially helping you to reduce the size of your monthly repayments.

“Also make sure that any borrowing is working hard for you. Look at where you can build points or get rewards with providers, like money off at the tills or cashback, to make the spending go a little further.”