Surviving January, a challenge for millions

Wednesday 6 January 2016

  • Almost one in three (30%) Britons felt pressured to spend more than they could afford over the festive period.
  • Money Advice Service expects a surge in the number of money and debt advice enquiries over the next three months, as people in need seek support.
  • One in 10 (9%) have fallen into debt or further into debt as a result of overspending.

Over one in four (28%) UK adults are set to struggle with money this month as the expense of Christmas takes its toll.

Money Advice Service research shows that one in three (30%) people in the UK said that they felt pressure to spend more than they could afford over the past Christmas period. Men and women are equally as likely to overspend (23% versus 24%) but men expect to overspend by more (£325 compared to £299 for women), and tend to put more of their Christmas spend on credit (26% versus 21% for women).

As a result, surviving financially in the month of January is likely to be a struggle for more than one in four adults (28%). This coupled with the fact that over two in five workers (44%) were paid early in December1 means that more than 13 million people2 will have a longer wait until payday this month.

According to the Money Advice Service, the number of people seeking debt advice is expected to surge over the next three months. This time last year, the service assisted almost 2.6 million money and debt enquiries compared to the average month, where they handled 2.1 million3.

The average household spends £429 over the festive period4 — this covers food and drink, presents, socialising and travel. Close to one in three (32%) said they experienced financial difficulty last January as a result of spending during the Christmas period, and the top three emotional responses to this was feeling anxious, worried and, in some cases, depressed5. Close to half (48%) of those experiencing financial difficulty say that budgeting would have helped them to prevent overspending and most (72%)6 are certain that they don’t want to start the new year in a similar situation.

Responding to the findings, Andy Webb, Money Expert at the Money Advice Service, says: “Our message in January is simple. If you are struggling to survive financially this month, now is the time to act. There are simple things you can do to get your finances back on track.

“Firstly, look at all your regular spending at home and keep track of it throughout the month. Doing this will help you see areas where you may be able to cut back, for example: cancelling unused subscriptions. You might be able to raise some extra money by clearing out items you don’t want or no longer use. Also, don’t underestimate how much you waste if you throw food away – plan your meals carefully and use up your leftovers.

“January can be tough, but committing to our Survive January campaign for one month will give you easy, fun ways to stop wasting money and change your financial habits for good. What do you have to lose? Visit moneyadviceservice.org.uk/survive-january to get your toolkit.”

It is estimated that more than a fifth (20%) of Christmas purchases were made on credit card and around one in 10 Brits7 used personal or payday loans (2%), overdrafts (6%) or borrowed money from friends (2%) to cover the cost of Christmas. This led to one in 10 (9%) saying that their festive spending put them into debt or pushed them further into debt. More than two fifths (43%) entered the festive period with outstanding debt, while one in 20 (4%) were still paying off debts from Christmas in 2014.

Webb continued, “If you’re worried about money you owe, then it’s best to get advice as early as you can. The Money Advice Service is here to help. We work with a range of partners to offer practical solutions to enable you to get your finances back on track. To see what free and confidential debt advice is available in your area, use our online Debt Advice Locator Tool.”

The good news is that more than half of Brits (51%) are making a financial resolution in 2016 to get their money in better shape — with saving more (24%), spending less (20%) and paying off debts (16%) among the most popular. One in seven (15%) are keen to make a budget plan each month and try to stick to it, in the hope of avoiding financial difficulties in the future.

The Money Advice Service has created a Survive January toolkit to give you checklists, tips and advice to get your finances back on track in January. Simply visit moneyadviceservice.org.uk/survive-january for more information and to sign up for updates.

ENDS

NOTES TO EDITORS

Opinium conducted quantitative research on behalf of the Money Advice Service; among a sample of 2,001 nationally representative UK adults aged 18+ during December 2015. These questions asked about respondents’ approach to spending over the festive period specifically — for example, how many overspend, by how much, and how many fall into debt as a result of this overspending.

The Money Advice Service also conducted quantitative research among 2,098 UK adults aged 18+, with the assistance of YouGov, during November 2015. This research focused on respondents’ relationship with money and budgeting.

The release also refers to official statistics from the Money Advice Service, on the number of debt advice and money advice enquiries the service received in January 2015 to October 2015.

About the Survive January Toolkit

The Survive January toolkit will include tips and advice to help people cut back their spending in January to get their finances back on track. Tips will focus on how people can cut back for example by selling unwanted items, switching energy bills and cutting down on food waste.

The toolkit includes:

  • Checklists – Simple checklists to help people identify what they can do to cut back and when to do it.
  • Budget planners – to help people consider where they can cut back.
  • Recipe Cards – These will provide quick tips for cutting back during the month.
  • Videos with tips and advice.

You can find more information and sign up for Survive January updates at moneyadviceservice.org.uk/survive-january

For media enquiries contact:

About the Money Advice Service

The Money Advice Service is an independent organisation. It gives free, unbiased money advice online at moneyadviceservice.org.uk, over the phone on 0300 500 5000, and face-to-face right across the UK. The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.

1 Source: Opinium. The average monthly paid worker was paid on 19 December 2015, three days earlier than usual.

2 Source: Opinium. 60% of UK adults are employed (30.4 million) and 44% were paid early in December. 44% of 30.4 million = 13,458,701 = 13 million.

3 Source: Money Advice Service. The Money Advice Service handled 2,597,810 money and debt advice queries in January 2015, and dealt with 2,142,505 in the average month in 2015.

4 Source: According to YouGov data.

5 Source: According to YouGov data.

6 Source: According to YouGov data.

7 Source: According to YouGov data.