As we quickly approach the end of the year, many UK households are now devoting their financial efforts to giving Christmas.
Christmas can strain household finances at the best of times, but it looks like Christmas 2020 will be even more difficult as the UK continues to battle the global pandemic.
A new report from Lowell asked UK respondents about their Christmas finances in 2020 compared to 2019.
Christmas 2020 should be different from any Christmas we have faced before as the effects of the coronavirus continue to take hold of our country.
With household finances affected due to the economic damage from the pandemic, Lowell’s report reveals that 30% of households will feel financial pressure this Christmas as well as areas set to cut spending the most next Christmas.
24% of households in London are expected to cut spending significantly this Christmas, followed by 23% in Bristol and 20% of households in Sheffield.
The table highlights the percentage of households by region that are ready to reduce their spending significantly this Christmas:
|
Zoned |
% of respondents |
|
London |
24.1% |
|
Bristol |
22.7% |
|
Sheffield |
20.0% |
|
Edinburgh |
19.2% |
|
Nottingham |
19.0% |
|
Leeds |
16.2% |
|
Belfast |
15.8% |
|
Liverpool |
11.5% |
|
Manchester |
11.4% |
|
Birmingham |
10.3% |
|
Norwich |
10.3% |
|
Newcastle |
8.9% |
|
Cardiff |
8.3% |
|
Southampton |
5.0% |
|
Glasgow |
3.4% |
Payday loans, borrowing from family / friends, Christmas loans and pre-purchase programs are expected to see a dramatic increase in demand this year as households struggle to cover Christmas costs.
The increase in these financing options is largely due to the pressures households face to overspend.
The report finds that 60% of households feel the pressure to overspend on gifts while 64% feel the pressure to overspend on food.
When asked how households financed Christmas 2019 and how it compares to Christmas 2020, we see that payday loans will increase by 110%, loans will increase by 55%, while disposable income is expected to decrease by 6%. .
|
Financing option |
% difference from Christmas 2019 to 2020 |
|
Payday loans |
110% |
|
Loans |
55% |
|
Borrow from friends or family |
36% |
|
Christmas pre-purchase programs (monthly paid Christmas catalogs) |
34% |
|
Savings |
-3% |
|
Disposable income (money from wages after other expenses) |
-6% |
|
-18% |
John Pears, UK Managing Director of Lowell said: “In these unprecedented and uncertain times, we understand that many people are struggling.
“We want to take this opportunity to stress that people shouldn’t feel pressured to spend more than they can afford at this time of year. credit to finance Christmas. Unfortunately, this can lead to debt which can get out of hand.
“There are a number of organizations that can help you if you need independent and impartial advice available on https://www.lowell.co.uk/help-and-support/independent-support/
“We advise anyone struggling with debt or worried about money to contact one of these organizations for help.”
