Yahoo Finance Two-third of Brits will struggle to make December payday last until January
Over two-thirds of Brits will struggle to make their December payday last until January’s, even as they cut down on Christmas spending, research suggests.
About 64% of people are planning to spend less across all their Christmas costs this year, yet 65% will still struggle to stretch their December income until they get paid again in January, according to data from ClearScore.
Of those who are planning to buy less this December, half are cutting back on the number of gifts they will be buying for family and friends.
The financial uncertainty caused by the COVID-19 pandemic has pushed people to tighten the purse strings during the final month of 2020 – when UK households typically spend up to £800 ($1,071) more than their usual monthly outgoings.
This cut is largely impacted by the fact that nearly seven in 10 (67%) people’s paydays are before Christmas, resulting in two thirds worrying they will struggle to make ends meet until January payday.
READ MORE: Coronavirus – Quarter of Brits to cut back at Christmas with London most-affected
Generation Z are the age group taking the hardest hit to their finances this December, with the majority planning to pay for Christmas using borrowed money and loans.
Buy-now-pay-later (BNPL) schemes are proving popular among gen Z, with nearly a third (32%) planning to use these to fund their festive spending - the highest of any age group.
Alongside BNPL platforms, a third of Gen Z are also putting their festive spending on their credit cards, with many planning to spend up to £100, the study found.
However, despite these cutbacks, people are more positive about the New Year and the opportunities it will bring to make their finances more resilient.
Heading into 2021, nearly four in five (78%) people plan to prioritise being more careful with their money and their spending, with 25 to 34-year-olds the most keen to get on top of their finances, at 82%.
READ MORE: Brits to spend £2.5bn replacing salvageable household items over Christmas period
Additionally, more than seven in 10 (72%) will prioritise looking after their credit score, which will help to strengthen their finances and future applications for credit, such as mortgages and new mobile phone contracts.
This optimism regarding personal finances, combined with the hopeful news of vaccines on the horizon, is reflected in the fact that the majority of people are more concerned about the lasting impacts the coronavirus crisis will have on the NHS (90%), the economy (92%), and their daily lives (90%) over the next year, than on their personal finances (79%).
“Using a balance transfer card, or switching to a 0% purchase card can help to spread the cost of the festive period, and potentially save you hundreds of pounds in interest payments,” Justin Basini, co-founder and CEO of ClearScore, advised.
He added: “It’s great to see 78% of people are looking towards the New Year as the time to strengthen their personal finances and work on their credit scores.
“Focusing on financial wellbeing should always be made a priority to shore up financial resilience.”
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