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Unison Warns That The Cost Of Christmas Might Last All Year

20th January 2014

A survey by the trade union Unison has provided a shock insight into the true cost of Christmas for many families living on modest incomes. They surveyed 1,000 people about the financial implications of Christmas during a period when many families are finding the cost-of-living escalating beyond their income.

67% of respondents reported that they had made spending cutbacks this year. That meant spending less than in the past on food, drink and gifts over the holiday period.

Despite these cutbacks 41% of the respondents had borrowed to fund the additional costs of this time of year. Most commonly this will have involved using credit cards, store cards, overdrafts and payday loans.

Unison reports that 50% of the respondents worry about how they’ll repay their debts. They also calculate that, on average, these debts repayments will not have been completed until November.

Dave Prentis, the union’s General Secretary, said, “With rises in household bills, transport costs, housing and childcare low-paid households are only one bill away from falling into a vicious cycle of debt”.

Unison report that five million adults in the UK are officially classified as being low-paid and that thirteen million people are living below the poverty line. Workers on modest salaries can be especially vulnerable to debt problems given that their disposable income (which is used to repay debts) is typically comparatively low.

Anyone who is struggling with their debts currently, whether those debts relate to Christmas expenditure or not, would be well-advised to take some time to review their financial position. Signs that a debt problem exists include:

  • Falling behind on debt repayments.

  • Juggling debts between different credit sources to manage through a month.

  • Using high-cost credit such as payday loans or doorstop lenders.

  • Relying upon credit to purchase regular essentials such as groceries or vehicle fuel.

If you’re concerned that these (or similar) factors are relevant to you it’s important to take a cold hard look at your monthly budget. Write down the money you have coming into your home. Then write down all of the money you need to spend. Don’t limit this expenditure to your bills; include allowances for things that you have to buy from time to time (car tax, haircuts and clothing are often forgotten for example) and realistic allowances for food, travel etc.

Is there more money going out than coming in? If there is, can you realistically cut back your expenditure (or increase your income) enough to make your budget balance? If you cannot, and you have debt repayments amongst your expenditure, it’s important to quickly seek the advice of a qualified and reputable debt adviser. Failing to do so is only likely to result in your financial problems growing over time.

Debt advisers can help in many different ways. Sometimes they can help you to re-budget in a way that will enable you to avoid having to enter a debt solution. They might also identify benefit income that you qualify for but which you aren’t currently receiving. If you just need a little help reducing the monthly repayments to balance your budget a Debt Arrangement Scheme may help you to achieve this. In more serious situations the adviser may suggest that a trust deed (or even bankruptcy) might be required to deal with the debts and to get a fresh financial start.

For further information or advice about your debts you can contact our qualified advice team or ask a question in our debt advice forum.

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