One in three people in the North East plan to borrow money this Christmas
New research has come out from the Money and Pensions Service
We are hearing how one in three people in the North East plan to borrow money this Christmas.
New research has been released by the Money and Pensions Service.
This year, they are asking those who plan on using credit to pay for Christmas or other religious and cultural holidays to “take a breath before you borrow.” This gives them time to assess their options and ensure they have a clear plan to repay the credit they take on.
MaPS is also urging people who are already struggling to use its MoneyHelper service, which offers free guidance on credit and finding debt advice.
Karleen Dowden, North East Regional Manager, said: "Money is always an issue and always has been at Christmas time. However I think what we're seeing this year is an increased amount of people borrowing for Christmas due to the current cost of living rising.
"People are using a variety of borrowing. The most popular one is credit cards but people are using products such as buy now, pay later or very worringly things like payday loans.
"What we're seeing is that people don't always have the means to pay this money back or where they are paying it back, it's taking them up to a year to be able to pay back everything they've borrowed for the Christmas period, so that means people are borrowing for this Christmas but are probably likely to still be paying it back by next Christmas.
"Is that purchase essential? Can they be having conversations with friends, family, their children and being honest about 'actually you know what? I'm not in a position to buy gifts this Christmas', and getting family members to understand their situation and actually what you find is that many family members understand and accept this.
"I think it's a little bit more tricky where children are concerned because they don't always have the understanding that actually Santa isn't coming this year, and it's when people need to be more savvy shopping around, getting the best deals and really only spending the minimum amount if they're unable to buy the products outright."
North East borrowing
- Forms of credit most likely to use: Buy Now Pay Later (55%), credit cards (53%), friends and family (26%).
- Amount planning to borrow: £201-£300 (21%), £301-500 (32%), more than £500 (3%).
- How long to pay it back: 3-6 months (40%), longer than six months (34%), longer than a year (11%).