Maw Comms news

5 Dec, 17 UK households to spend £20bn* celebrating Christmas

• £726 – the average household cost of Christmas;
• Gifts represent the biggest Christmas expense, with an average anticipated spend of £372 per household;
• 18% will pay for at least part of Christmas on a credit card;
• Average time to repay seasonal borrowing is 3.2 months, but 14% of borrowers will take over six months to repay.

According to new research** commissioned by GoCompare Money, this Christmas the average British household expects to spend £726 on presents, parties, feasting, gifts and decorations.  For UK households as a whole – that equates to £20.3bn.

Gifts for loved ones represent just over half of households’ Christmas expenditure, with an anticipated average spend of £372.  A third of households expect to spend over £400, 21% will spend over £500.

Festive food and drink, including the main Christmas supermarket shop, is the next biggest outlay, on average households anticipate spending of £168.  Other areas of expenditure include socialising (£103) and buying a Christmas tree, decorations and a trip to the panto or other Christmas experience (£83).

When asked how they plan to foot the bill for Christmas, the majority of people surveyed (68%) said they will cover most of the cost out of income.  A quarter (24%) have put money aside throughout the year to cover the cost of their festive spending.  Just under a fifth (18%) will use a credit card, 4% of whom say they will use their card to pay for all their seasonal spending.

Of those who plan to borrow money or use a credit card to pay for Christmas, 36% anticipate they will be able to clear their debt within a month.  The average time expected to repay festive spending is 3.2 months.  A significant minority (14%) reckon it will take them over six months to clear their Christmas debts, while 6% will take over a year to clear this Christmas’ spending.

Commenting on the research, Georgie Frost, GoCompare’s consumer advocate, said, “Christmas is a time for enjoying yourself with friends and family, but it is so easy to get caught up in the festivities and overspend, leaving you with overdraft charges or worse. The last thing you want to do is start the New Year with new debt.

“As always, the trick is to be aware of the spending pitfalls this month: the early sales, work drinks, panic buys – and have a plan, which includes a budget, for dealing with it. If you are planning to get away over the holidays, buy your tickets in advance; check online that items you are planning to buy in the sale are genuinely good value; and tell your colleagues or loved ones your savings goals, so you don’t feel under pressure to spend when out.

“Use cash wherever possible as this can help you with budgeting but another option is to spread the cost of Christmas using a 0% credit card. There are a range of deals available at the moment, offering interest-free periods of over 30 months.  But remember, only get a credit card if you know you can pay it all off and if you expect to pay off the debt relatively quickly, you could be storing up trouble by taking a deal that lasts for close to three years. There are plenty of interest free card deals for 6 to 12 months and they could help you focus on paying the debt back earlier, rather than risking forgetting about it, incurring interest or building up more debt.”

Tips from GoCompare Money on managing Christmas card debts

Take control – When your credit card statement arrives, don’t ignore it; your debt will increase as interest is added to the outstanding balance. If you’re currently struggling to repay credit card debt visit: https://www.stepchange.org/

Don’t just make the minimum repayment – Card issuers add interest to any outstanding balance so, the longer you take to repay the debt, the more money you will owe.  If your debts are spread across more than one card, pay off the most expensive card first.

Switch cards – If you find yourself paying interest, consider transferring your credit card balance to a new card with an extended interest free period on balance transfers.  Make a note in your diary of when the introductory period ends, this will help you avoid paying interest on the outstanding debt. You usually pay a balance transfer fee for moving your debt.  This is calculated as a percentage of the debt you’re transferring and varies from card to card.

Avoid fees for missed payments and cash – Card issuers typically charge around £12 for missed payments.  Also, depending on your card’s terms and conditions, failure to make a monthly payment on time can result in an introductory offer (including 0% deals) being withdrawn.  Avoid using your credit card as a cash card, the additional charges (between £1.50 and £5.00) make this an expensive way to borrow money.

For more information on interest free credit cards visit: http://www.gocompare.com/credit-cards/interest-free-credit-cards/

   -ends-

For further information please contact:
Anders Nilsson or Martyn John at GoCompare on 01633 654 054 / 01633 654 725

Gordon, Jason or Liz at MAW Communications on 01603 505 845

Notes to editors:

*According to the ONS (2015) there are 28 million households in the UK: 28 million multiplied by average spend per household of £726 equals £20,328,000,000.

**On 22 November 2017, Bilendi conducted an online survey among 2,000 randomly selected British adults who are Maximiles UK panelists.  The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.

GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.

GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.

GoCompare does not sell its customers’ data.

When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.

GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).

For more information visit www.gocompare.com and www.gocomparegroup.com