Two-thirds of parents feel pressured to spend above their means at Christmas

6th December 2023

Latest research from the Financial Conduct Authority (FCA) has found almost half of UK adults (47%) feel pressured to spend above their means during Christmas to provide for loved ones, rising to almost two-thirds (64%) for those with children under 18.

Two in five (40%) UK adults, and over half of those (52%) with children under 18, are also concerned about being able to afford Christmas spending this year. As a result, over a quarter (29%) of parents have borrowed money, or intend to, for Christmas this year. The amount borrowed has increased by more than a third, from £305 last year to £412 this year. According to Debt Free Advice, the debt advice coalition, new debt assessments between December 2022 to March 2023 were 83% higher compared to April to July 2023.

With financial pressure building and more looking to borrow, the FCA is concerned stretched households could be vulnerable to loan fee fraud. Loan fee fraud – where a consumer pays a fee for a loan they never receive – typically results, on average, in a £255 loss.

Therese Chambers , Executive Director of Enforcement and Market Oversight, said “Fraudsters will take advantage even of parents’ desire to give their children a good Christmas. Don’t let them. Remember the 3-step check and protect yourself and your loved ones from loan fee fraud. If you are cold called or emailed, it could be a scam. If you’re asked to pay an upfront fee, it could be a scam. And if you are asked to pay quickly or unusually, it could be a scam.”

Matt Dronfield, Managing Director of Debt Free Advice, said “As Christmas approaches, families across the country face mounting pressure to keep up with societal expectations, often leading to increased debt and financial strain. Many of our clients are already burdened by the weight of utility bill debt, imposed by the ongoing cost of living crisis. Holiday-induced debt can have far-reaching consequences, affecting families’ financial stability, mental health, and overall wellbeing.”