Half of UK shoppers paid for Christmas on credit this year
A new Which? study has found that 46% of UK shoppers used credit cards, overdrafts, store cards or payday loans to cover Christmas spending this year, while 36% dipped into their savings to pay for their festive purchases.
With energy and food costs continuing to rise, the survey also found people did not feel positive about the New Year with 54% of people expecting their household budgets to be even tighter in 2013.
In addition, the research revealed that 56% of shoppers spent less on Christmas this year than last year, with 43% saying they significantly cut back spending. Almost a quarter (22%) said they could only afford to pay for Christmas by using credit cards and overdrafts.
Those who dipped into their savings took out an average of £380 while those who used credit to cover Christmas costs borrowed an average of £301. 12% used authorised overdrafts, 8% used store cards and 5% of people borrowed money from friends or family.
Never Miss a Retail Update!Half (48%) of people did not buy as much food and 45% bought less high quality food than last year because of increasing food prices.
Six out of 10 (61%) people felt this Christmas was financially tougher than last year; however three quarters (75%) said their Christmas would not be any worse as a result of having less money to spend.
Which? executive director, Richard Lloyd, said: “Most of us like to splash out on family and friends at this time of year so the news that millions of people have drastically cut back on Christmas spending or taken out loans to cover Christmas costs shows just how squeezed household budgets are right now. It also shows how far we are from a consumer spending-led economic recovery.”
