Families in South-East risk '˜nasty hangover' of Christmas debt
More than a quarter (28%) of families in the South-East plan to borrow money to cover the costs of Christmas this year, a survey by The Children's Society has revealed.
The survey, which also found that – nationally - one in ten families borrowed over £500 for last year’s festivities, raises concerns about the number of families with children who may find themselves at risk of falling into a debt trap by New Year’s Day.
The costs of Christmas presents, food, drink, decorations, travel and other related activities see families spending an average of £700, according to the Opinium survey of 2,000 adults.
On average parents spend £340 on presents alone, with one in five spending over £500 on gifts. To fund all these costs almost one in five (17%) will borrow on their credit cards this Christmas.
The challenges are even more sobering for families who have already found themselves in problem debt this year – more than half of them (54%) are planning to borrow more to cover the cost of Christmas, with almost a quarter counting on their credit card.
For families who are struggling, borrowing can have a number of unintended consequences. In the worst cases, where credit repayments take up a larger proportion of income, parents can find themselves in a debt trap from which it can be hard to escape.
The risk is that parents with children may find themselves cutting back on essentials to meet debt repayments. The survey shows that over half of families in problem debt in the last year cut down on their heating in the weeks after Christmas in an attempt to rebalance their finances after the festive period.
Problem debt can damage children’s physical and mental health. In September, The Children’s Society revealed that children in living in families with problem debt are five times more likely to have low wellbeing than those that are not.
Gary Thomas, South East Area Director at The Children’s Society, said: “All parents – particularly those who are struggling – need to be aware how difficult it can be to shake off Christmas debt. No-one wants children to miss out on the fun and excitement of Christmas, but neither would anyone wish parents to wake up on New Year’s Day with a nasty hangover of debt.
“We know the damage problem debt can cause to children, who often pay the price with their mental and physical health, and that’s why we’re calling on Government to give families the time and space they need to get their finances back on track.”
The Children’s Society, as part of its Debt Trap campaign, is calling for better support for families with children who fall behind on bills and repayments. It is urging the Government to introduce a 12-month ‘breathing space’ scheme to give struggling parents a period of protection to put their finances in order and get back on their feet.