The worsening cost-of-living crisis will force UK families to tighten their belts this Christmas, cutting back on presents or food, The Guardian reported last week, citing new research by National Debtline.
Data shows that around 6.5 million people will struggle to heat their homes sufficiently during the holiday season, while 2.7 million will have to choose between buying food or presents.
According to the report, over 14 million consumers are planning to limit the number of presents they intend to buy this year, while 6 million have said they can only afford to buy gifts for children.
“This Christmas, the cost-of-living crisis is set to be felt more than ever with millions of people struggling to heat their homes and many experiencing money worries,” said David Cheadle, the acting chief executive of the Money Advice Trust, which runs National Debtline.
The study showed that more than 24 million UK adults plan to use credit to pay for Christmas presents this year. Of those, 12 million intend to use credit cards, while 4.7 million will use a ‘buy now, pay later’ loan to pay for purchases over time.
“We remain deeply concerned about the long-term impact that rising arrears will have on household finances going into 2024 and beyond,” Cheadle said, as quoted by The Guardian. “After missing the opportunity to help people in debt in the autumn statement, we are continuing to press the government to introduce a ‘help to repay’ scheme for energy arrears, and extend the household support fund which is providing crucial local support,” he added.
Household debt in the UK is projected to balloon from the current level of £73 billion ($92 billion) to £151 billion ($190 billion) in 2026. According to the Office for Budget Responsibility (OBR), British households are suffering the biggest five-year drop in living standards to have hit the country since it started compiling records in the 1950s. Real household disposable income per head is estimated to be 3.5% lower than its pre-pandemic level.
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