People urged to take a breath before borrowing for the festive season
The estimated 14 million people who plan to borrow money for Christmas or other religious and cultural holidays over the next three months have been urged to take a breath before taking the plunge.
A survey by the Money and Pensions Service (MaPS) found over a quarter (26%) of us are likely to borrow for upcoming holidays like Christmas and Hanukkah.
Most popular borrowing
Among those who said they were planning on using credit to get through the festive season:
- over half (52%) said they’d probably use credit cards
- more than a third (35%) said they’d rely on buy now pay later
- just under a quarter (24%) said they’d turn to their overdraft
- a sixth (17%) said they’d tap up friends and family
- more than one in ten (12%) said they were considering a payday loan
- just under one in ten (9%) said they’d opt for a credit union
- more than one in twenty (6%) said they’d try their luck with a pawnbroker loan
How much people plan to borrow
Of those who plan to borrow:
- nearly half (45%) said they’d be looking for someone to lend them between £101 and £300
- almost one in four (23%) said they’d likely need between £301 and £500
- more than one in ten (11%) said they expected to borrow over £500
How long it will take to pay back
When asked how long it would take to pay back the money they plan to borrow:
- nearly one in five (18%) said between seven and 12 months
- more than one in ten (13%) said over a year
Take a breath
MaPs is calling on people to “take a breath before you borrow”. It explained that pausing before taking out additional credit gives people time to assess their options and make sure they have a clear plan on how they’ll repay what they borrow.
It’s also urging people who are already struggling to seek debt advice.
If things are getting out of hand
Caroline Siarkiewicz, chief executive of MaPS, said:
“The holidays are a wonderful time of year, but they can also make people feel pressured into spending much more than they can afford…
“What’s particularly worrying is that some will still be repaying when next year comes around…
“If things are getting out of hand, or you start needing credit for essential costs, it might be time to seek help.”
A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.
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