One third of adults will run out of money by end of January

One third of adults in the UK will run out of money by the end of January, a new survey by Credit Karma has found.

The research said that by 20th January, 56% of adults will have spent their entire monthly income, due to higher winter bills and financial strain from Christmas expenses.

As a result, many people are likely to turn to alternative sources of funds, such as credit, with 19th January the most likely application date, according to the finance company.

The most common credit options were credit cards (22%), buy-now-pay-later schemes (6%), car finance (4%), and personal loans (4%).

In order to help manage finances at the start of the year, 26% of people surveyed said they plan to avoid socialising, while 47% will refrain from purchasing new technology.

Meanwhile, 29% of people said they plan to apply for credit in January to cover essential bills and necessities and 31% said they have either already used or plan to apply for credit to help manage their Christmas expenses.

Akansha Nath, General Manager at Credit Karma, said “The high cost of Christmas often leaves a sting in the tail of January budgets, as many people have to wait longer to get paid, as well as cope with expensive winter energy bills.

“That’s why now is the time to consider a budget planning tool, to help plan outgoings.

“If you have taken out credit over Christmas, consider the best ways of paying that off whether it’s consolidating your debt or looking for an advantageous balance transfer offer.”