Debt fears deepen as UK to spend an estimated £22 billion this Christmas

The UK is on course to wake up to a huge debt hangover in January 2020, with over 8 million admitting they are likely to fall behind on their finances after overspending at Christmas and the nation due to spend an estimated £22 billion in December.

It’s clear that people worried about debt aren’t being treated consistently, which is why we’re calling for more support for people struggling financially.

What the UK needs

• A consistent approach to how businesses deal with people in debt, with those in financial difficulties given a short ‘breathing space’ where no interest or fees are charged while they regain control of their finances.
• The opportunity for people trapped in their overdrafts to be given interest-free loans that don’t get registered as ‘defaults’ by the banks.
• Further support to raise awareness of free services like StepChange that help people manage their finances – and clear warnings about debt management services that charge fees.

The requirement to help people struggling with debt already exists in financial services and the FCA, while the Financial Ombudsman also has a long-standing policy.

However, many of Resolver’s three million users tell us that when they’ve looked for help, they’ve not received it.

December debts and Christmas spending – the big numbers

• The Bank of England says we spend an extra £800 in December on top of the average household spend per month of £2,500.
• According to most recent ONS estimates there were 27.2 million households in the UK and 19 million families, giving an overall extra spend in December of £22 billion (£21,760,000,000).
• Meanwhile, the Centre for Retail Research is estimating a spend of £2.53 billion on Black Friday and £8.57 billion over the whole weekend to Cyber Monday (up 3.4%).
• People in the UK owed £1,661 billion in debt as of last September (up £930 per person on the same period last year according to the Money Charity).
• Over 8 million people are regularly struggling with ‘problem debt’ where they ‘frequently have difficulty meeting their bills and credit commitments, or feel their debts are a heavy burden’.

Resolver’s key stats

In the last financial year, Resolver has seen increases in complaints in:

• Online shopping – up 88% to 108,315
• High street shopping – up 39% to 83,386
• Credit cards – up 56% to 13,917
• Current accounts – up 15% to 11,492

Complaints about ‘buy now, pay later’ or ‘shop credit’ have already hit 7,572 in just a year.

Resolver spokesman and consumer rights specialist, Martyn James, says:

As a nation, we’re sleepwalking in to debt, with countless people not realising until it’s too late how overstretched they really are. Don’t wait until January to wake up to a debt nightmare. If you think you’ve overspent already – or are worried about making ends meet – there’s help available for you right now, for free.

We’re working with Experian to help people worried about their credit files. Debt needs to be easier to deal with – and we’re committed to making a difference.

Resolver has helped over 5 million people sort out complaints about everything from pensions to parking tickets – and it’s a totally free service, with over 3 million regular users.