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February 2023 - Financial Services

63% of households relied on credit cards or overdrafts to cover Christmas costs: A consumer survey has revealed that 63% of households relied on credit cards or overdrafts to pay for Christmas presents and other festive costs.

The survey was conducted by Credit Karma also finding that around a fifth of UK consumers fell into the red for the first time in the last year - due to rising inflation and the cost-of-living crisis. It found that over the last year around a third of respondents have changed their lifestyle to make their money go further, with the same proportion saying that their wages don't stretch as far as they used to.

In another survey conducted by The Money and Pensions Service it was found that almost a quarter of respondents have used credit or have asked their families for money to buy groceries or pay a bill in the last three months. A similar number also admitted to borrowing money to pay their energy bills, with around half admitting they had never had to do this previously.

Also revealed by the research was that around a fifth of respondents are relying on borrowing to pay their rent or mortgage or pay off other forms of credit as well as for healthcare needs such as visiting the dentist or prescriptions -- and again, around half said they have never had to do so before.

Akansha Nath, of Credit Karma UK, said: "Borrowing has become a reality for many households trying to keep up with rising prices over the past year.

"As our research shows, this has been unavoidable even for those who have made a concerted effort to cut back and reduce spending where possible."

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