02/01/13
By Tim Sanderson
Almost half of Britons paid for their Christmas on credit, according to a consumer group.
The research by Which? on 2,000 people throughout Britain showed that 46 per cent used overdrafts, store cards and payday loans amongst others to cover the costs, while 36 per cent used their savings.
Next year is expected to be even tighter financially 54 per cent thought, while 40 per cent had reduced their expenditure this year drastically.
Around 25 per cent said that the only way they could afford Christmas was by using bank overdrafts and credit cards.
Of the people who used their savings they typically took out £380, while £301 was on average gained from those utilising credit.
Authorised overdrafts were used by 12 per cent while 8 per cent took advantage of store card facilities while 5 per cent borrowed from relations and friends.
High food prices affected many and 48 per cent reduced the quantity of food they bought while 45 per cent cut back on high end quality food.
Pressure on the family budget is expected to become greater next year following energy price increases.
Which? executive director, Richard Lloyd, said: "Most of us like to splash out on family and friends at this time of year so the news that millions of people have drastically cut back on Christmas spending or taken out loans to cover Christmas costs shows just how squeezed household budgets are right now.
"It also shows how far we are from a consumer spending-led economic recovery."
According to the British Bankers' Association families are paying back "virtually as much as they borrow" and this is despite an increase in mortgages on properties and people spending more on credit cards.
The financial information company Markit produced similar results to those found by Which? Markit found that 75 per cent of households expect their financial situation to become worse, or stay the same, over the next year.
