Brits spending again at Christmas but at what cost?
Brits are throwing caution to the wind, being prepared to slap Christmas spending on credit to indulge this Christmas, leaving us with a debt hangover in the New Year that we can¬ít repay due to austerity measures which will start to take hold predicts Datamonitor.Research by the independent market analyst has revealed that with Christmas spending set to reach the highest level since 2007 but with little improvement in the finances of consumers since last year, it is not a case of having more money to spend. Instead consumers are likely to find the extra cash by dipping into their overdrafts, using their credit cards and other short term, often expensive, debt.
The Datamonitor research found that it is younger consumers who are most likely to spend beyond their means with nearly 30% of 18-24 years turning to credit. Interestingly geographically, it is Londoners who are more likely to overstretch themselves with 25% likely to use credit compared to 16% in East Anglia and just 15% in Wales.
Annabel Gorringe, analyst at Datamonitor, said: “Although it is normal to see consumers overspend at Christmas, the last time they spent at this level was in 2007, before the recession had begun to bite. It appears they have not learnt the lessons of the credit crunch and are happy to overstretch themselves.
“This year with VAT rises, public spending cuts and austerity measures likely to take hold in the New Year many consumers could be in a position where they can’t pay off the debt they racked up at Christmas
“While it is positive for the high street and in fact the overall economy that consumers are returning to a similar level of spend we saw pre-recession, it is a concern that consumers are adopting a “live for the moment” attitude when the New Year may hold an uncertain future for some.”
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