'Christmas on credit' on the rise
AN ESTIMATED 1.4 million people in the UK plan to use payday loans to cover the cost of Christmas this year, research suggests.
The survey by the Money Advice Service (MAS) found that 46% of British adults say they'll rely on their credit card or overdraft to cover the costs.
But 29% are worried about how they'll pay for it all, and 26% say they think they'll spend more than they can afford.
Meanwhile the Debt Advisory Centre says 10% of people are still paying for last year's festive blowout.
In a Europe-wide survey, ING found that 30% of people said Christmas was the one time of year they didn't worry about what they spent, regardless of their financial situation.
They also found that Britons plan to spend more on gifts than anyone else in Europe.
Meanwhile 30% of Britons told MAS they would find it more difficult to pay for Christmas this year than they did in 2013 - down from 38% this time last year.
The proportion of people worrying about how they're going to afford it all has dropped from the same figure, 38% in 2013, to 29% this year.
The number of people who think they're going to spend more than they can afford has dropped slightly, from 27% last year. Just over a third think they're going to stretch themselves to cover it, compared to almost 40% last year.
All the same, some 4% of adults say they've decided not to buy presents at all because of money issues.
Among the 24% of us who don't plan ahead, almost a fifth say they simply can't afford to. Another 17% say they find it difficult to put money aside each month, and a further 13% say they live on a month-to-month basis.
Last year 32% of adults planned to use their credit cards and overdrafts to finance Christmas - compared with the above figure of 46% this year.
But according to ING, almost half of us say we've thought ahead and put money aside specifically for the festive season - so why are so many more of us planning to borrow to help cover the cost?
What we're spending
MAS say we'll spend an average of £530 each - compared to an expected average spend of £487 each last year, and £508 each in 2012.
That adds up to a predicted "seasonal spend" of £26 billion in 2014 - £2 billion higher than last year.
Figures from YouGov show households intend to spend £599 on gifts alone this year, up almost 6% on last year, while food and drink will cost each household an average of £180 - an increase of 11.6% compared to 2013.
Cards and decorations will add £43 to the festive bill, up nearly 7% on last year.
YouGov says the more affluent households are in large part responsible for the increase in predicted spending this year.
Wealthier households are planning to spend at least 10% more on gifts this year than last, while the less well-off say they intend to spend at least 2% less on presents.
YouGov's James McCoy points out that last year actual spending outstripped predicted and planned spending, "and the same thing may well happen again in the run-up to this Christmas."
It's a shame, then, that MAS say we wasted almost £2.4 billion on food, drink and presents that weren't wanted, used or needed last year - that's an average of £28.
And while Christmas jumpers are now trendy, 37% of us are still receiving presents we don't need or want, with an average value of £54.
The festive hangover
ING says 14% of Britons found themselves in debt after Christmas last year - and plenty of people are still paying for Christmas 2013 as the doors on the advent calendars start opening once more.
Those most likely to be affected are between 25 and 34. Among this age group, nearly 20% say they have outstanding debts from last year.
Of them, two fifths say they still owe more than £500 - and almost a quarter say they have more than £1,000 outstanding.
The financial hangover isn't anything new: in April 2012 a fifth of people said they were still paying for Christmas 2011, and many predicted they'd still be paying for it a few years on.
One study suggests that it takes six months for the average family to clear their Christmas bills - so it's no surprise so many people say they find it difficult to save for the following year's spree.