Millions of people will have to make stark financial choices this Christmas including choosing between buying food or presents and be unable to afford to keep their homes warm through the festive season, according to new research by National Debtline.
About 6.5 million people will struggle to heat their homes sufficiently this festive season, while 2.7 million will have to choose between buying food or presents, highlighting the drastic impact the cost of living crisis continues to have on household budgets.
More than 14 million consumers are planning to cut back on the number of presents they intend to buy, while 6 million have decided that they can only afford to buy gifts for children this year.
“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, the charity that runs National Debtline.
The survey of 2,000 UK adults also found that many consumers are likely to turn to credit cards and other repayment methods, including buy now, pay later providers such as Klarna and Clearpay.
More than 24 million UK adults – 40% of the UK population – plan to use credit to pay for Christmas presents this year.
Of these, 12 million plan to use credit cards, while 4.7 million will turn to buy now, pay later plans to stretch the repayment timeline for Christmas presents over several months.
“We remain deeply concerned about the long-term impact that rising arrears will have on household finances going into 2024 and beyond,” said Cheadle. “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.”
National Debtline said the situation could prove to be a ticking timebomb with many of those in debt keeping it secret as they struggle with their personal finances.
Almost a quarter of those in debt say they feel embarrassed about their situation. One in six people in debt say they have not told anyone about their situation, while 10% fear telling even their partner or a loved one.
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“It shouldn’t be this way,” said Cheadle. “No one has to go through a debt problem on their own.”
The headline rate of inflation fell to 4.6% in October, compared with 10.5% last December, prompting Rishi Sunak to declare victory in achieving the government’s goal of halving the rate of inflation by the end of this year.
However, two years of steep bill increases mean that households are footing significantly increased bills.