LONDON | It might prove to be a time bomb for British high streets: one in five people aged between 18 and 44 are still trapped in debt they incurred in to cover consumption last Christmas. Research from Halifax shows that 14% of people are still paying for Christmas either on a credit card, through their overdraft or via a loan. However, fewer of the older generation are in the red because of the festivities, with the number still paying to Christmas falling to 9% of those over the age of 45.
While only 9% of people in Scotland are still paying for Christmas, this grows to 21% in the North East. Credit cards are the most popular way for people to fund Christmas on credit, with nearly 1 in 10 people still managing festive spending on their card balance. 4% of people say that they are in their overdraft because of Christmas excess, and a further 3% are repaying a loan that they took to help their Christmas spending.
Anthony Warrington, head of current accounts at Halifax, noted these figures are exceptionally worrying:
“We all face unforeseen costs from time to time, but Christmas shouldn’t be one of them. If it’s December before you think about how to pay for it, it’s too late.”
9% of those still paying for last year’s festive season say that they will still be paying their 2011 Christmas bill into 2013. Although 18% expect to be free of Christmas debt by June 2012, 8% say that they will have settled their bills by next month. Halifax data indicated that those in the North of England spent the most on Christmas last year. At £530, this is £28 above the UK average of £502.
The British Retail Consortium (BRC) welcomed the public money that has been made available to enable the development of Business Improvement Districts and other moves to support town centre regeneration. BRC particularly mentioned a battery of government projects with around £11.5 million of funding attached
“at a time when retailers are having to find an extra £350 million because of a 5.6 per cent rise in business rates,” it said in a press release.
British Retail Consortium Director of Business, Tom Ironside, commented that high streets are at the heart of UK towns and cities and stressed the sector needs help to survive the current economic crisis.
“Retailers are doing their best to boost local high streets where they’re able to, working with local authorities and other businesses, but an example needs to be set by central government.”