Personal Insolvency Increases Due to Christmas

A new report conducted from research by GfK NOP on behalf of R3 has shown that almost 4 million Brits have gone into debt as a result of their overspending over the festive period.  The report has also shown that around 6.5 million are now panicking that they will not have the finances immediately available to cover their expenditure in January.

The study has also revealed that around 8% of the people survey, designed to give a good representation of Britain as a whole, had borrowed money from various sources in order to cover the cost of Christmas.  Another slightly more alarming fact showed that nearly 3 million Brits, approximately 6% of the population are still struggling financially due to debts that accumulated last Christmas.

According to the research, the main reasons behind the excessive spending are apparently guilt and peer pressure as people worry about meeting what they believe to be the expectations of friends and family.  Around a third if British people admit to feeling a sense of guilt about failing to live up to the standards they feel are being set.

Consumers struggling due to Christmas have been encouraged to seek impartial debt advice by Insolvency Director Derek Oakley at Debt Free Direct. He has said,
"Christmas can be a difficult financial time for consumers, especially those already struggling with debt. In turn, the added financial pressure of the festive season may lead to an increased number of Insolvencies in January."  Mr Oakley also added,
"Many consumers may not be aware of the debt solutions available to them. When seeking help, it is vital that consumers should get advice that is based on their individual circumstances."

2009 saw a record number of personal insolvency cases in the UK, with the figure likely to increase again this year as people try and overcome the financial constraints they have gotten into over the Christmas period as well as the likelihood of similar things happening next Christmas.  

Consumers currently struggling are being encouraged to assess their current expenditure and devise a reasonable and realistic budget for the coming months and if that is not posible seek further advice from a debt management company.

Posted at 09:00AM Jan 31, 2010 by Kris Wigfield in Personal Finance  |  Comments[0]