Coronavirus leading to financial pressure for Christmas 2020

 

Find out about the impact that Coronavirus could have on financial pressure for households at Christmas time, and the help and support you can access this year.

At this time of year, many UK households are looking towards Christmas and worrying about the cost of their annual festivities. Christmas can put a strain on household finances even at the best of times, but it seems that funding Christmas in 2020 may be even more of a challenge as we continue to battle the global Coronavirus pandemic.

New research commissioned by Lowell shows that the strain on household finances could be more challenging this year, with applications for payday loans on the rise, and with the younger consumers likely be the hardest hit this winter.

We asked UK respondents, aged 34 and under, about their Christmas financial situation compared to last year. 43% said that they feel pressure to spend more than they can afford, and 20% felt under pressure to buy more than they feel they need.

Another cause of Christmas stress is the pressure felt to buy high-value items or more premium brands in order to make the holiday feel special. With 60% of households feeling the need to overspend on presents and an alarming 64% overspending on food, the pressure to provide a ‘perfect’ Christmas can be stressful, especially if you’re dealing with financial issues.

Driven by social pressures, more and more households will turn to like payday loans and borrowing from friends and family. As the impact of Coronavirus continues to be felt, our research reveals that many UK households are planning on using loans to pay for Christmas, with payday loans set to rise by a staggering 110% compared to 2019.

Coronavirus is already having a big financial impact on many households, and the pressure to overspend at Christmas could make this worse. Survey findings show a marked increase in borrowing from last year, with many households and especially young people intending to use credit to fund their Christmas celebrations.

At Lowell, we understand the pressure to have an ideal Christmas can lead to an increase in household debt that can be difficult to manage. We believe in helping our customers to manage their financial situation, so that they can work towards becoming debt-free. If you’re a Lowell customer and you’re feeling concerned about the impact that this Christmas might have on your budget, please give us a call and speak to our supportive team who can talk through your options or help you access independent help.

If you’re feeling financial pressure this Christmas, or at any time of the year, remember that independent support and advice is available for you. You can find a list of organisations who can help you at our independent support page. You can find more information and guidance, news and advice about debt and finance at the Lowell blog.

Data source: Survey of 1000 UK respondents conducted via The Leadership Factor on behalf of Lowell

Written by Emma Sams on 8 December 2020

 

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