Over half of people in debt following Christmas expenses

Over half (55%) of people are in debt following Christmas expenses having spent £635 (on average) across the festive break  according to latest research by Confused.com.

The date showed that nearly three in ten (29%) think it will take them over a month to financially recover from Christmas 2025. On average, people take a month to settle their Christmas costs and reset financially for the New Year,  with nearly a quarter (22%) taking three to four weeks to pay off festive debts.

With median weekly earnings for full-time employees sitting at £766.60 as of April 2025, it’s unsurprising that people are tightening their belts entering the New Year to preserve what they can of their salary.

Despite this, nearly one in two (45%) people feel financially ready for the year ahead. With a third (33%) reviewing their finances in January, more people are taking the opportunity to seize control of their outgoings and financially reset for the year ahead. To overcome financial pressures in 2026, almost a third (32%) of people pay off their Christmas debts by dipping into their savings.

Meanwhile, over half (56%) use their salary to cover Christmas costs, followed by 32% using their savings. This shows people are financially aware and more savvy with spending amid the ongoing cost-of-living crisis.

The festive period is the most expensive time of year for many, with additional expenses like gifts, more food, and decorations increasing  monthly spending. . That’s why more than two fifths (43%) save regularly throughout the year to pay for Christmas, helping to avoid a sudden surge in spending towards the end of the year.

To start the new year financially secure, many peopel look to clear debts from the previous year. That’s as nearly one in six (16%) regularly do a balance transfer on their credit card to avoid paying interest when managing Christmas costs.

Over one in ten (11%) transfer debts to a zero-balance credit card. This reduces pressure for people to pay off their debts straight away and instead allows people more flexibility to repay them at a pace that  suits their financial situation, without incurring additional interest.

For 6% each, taking on another job, borrowing money from friends or family, or taking out a loan is how they clear their balance. The measures people will go to in order to clear their debts show a strong commitment to ensuring their finances are organised for the year ahead.

Nicola Morgan, Personal Finance Expert at Confused.com, said “The New Year is an opportunity that many people take to look for ways to make improvements for the year ahead. “With money being a priority for many across the country, now is a good time to preserve finances for the upcoming year. There are small steps you can take that make a big difference to your future financial situation. It’s important to find a method of saving that works for you and aligns with your lifestyle. But keeping an eye on your spending and saving where you can will help ease strain and worry throughout the year ahead.