Brits are set to face £5.8bn ($7.7bn) in unexpected expenses this Christmas, as COVID-19 contingency plans eat into budgets across the country.
Credit card start up Tymit found that one in four celebrators (25%) are feeling the pressure to make this Christmas the best ever after a year dominated by the pandemic, with 21% set to spend extra to make this a reality.
This, combined with the fact that COVID-19 has stretched many people’s finances to the limit means nine in 10 festive budgets are set to be blown, leaving people facing debt in the new year.
The research found that three in ten people have saved less this year and 18% haven’t saved at all.
Last-minute COVID-19 regulations, including a three household maximum on celebrations, has created an environment where 1.3 million people are facing hosting celebrations for the first time. Almost a third (30%) of people that celebrate Christmas have changed their plans due to the rule.
The research found that while the average spend of hosting is £427, first-timers will have to dig a little deeper into their pockets, as 70% of seasoned hosts admitted that their first time hosting Christmas was their most expensive ever.
Buying too much food is the expense that catches out the most (31%) first time hosts, as well as choosing more expensive food and drink (22%), purchasing new tableware (17%) and additional decorations (17%).
Also, one in seven Christmas revellers (15%) are still paying off debt from Yuletide celebrations last year.
Alongside this, two in five celebrators (41%) don’t set themselves a Christmas budget. For those that do, the vast majority are set to go over them (90%), despite only 24% realising ahead of time that they will.
When analysing respondents’ pledged versus predicted spend, the research forecasts over £5.8bn of unexpected expenses for Brits this Covid Christmas, which could send them into the red.
Over a third (34%) of people are turning to credit as an alternative to fund festive spending, including credit cards (18%), overdrafts (7%), loans (5%) and Buy Now Pay Later services (6%).
One in eight (14%) of those say they don’t know when they’ll be able to pay it off completely and 15% of those who used credit to fund Christmas last year are still paying this off.
Martin Magnone, CEO and co-founder of Tymit said: “Christmas excitement can cause many to forget about financial pressures or regular budgets. With uncertainty around government restrictions leaving many people planning Christmas at the last minute, it’s even easier to ignore.
“Not thinking carefully about your spending or having unexpected festive expenses could bring forth the Ghost of Christmas past: debt. Entering 2021 without a plan to pay that debt off is the last thing anyone needs after such a challenging year.”
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