Over 14 Million People Suffer Post-Christmas Debt Stress

• Women take action to repay debts
• 15 per cent of men have no repayment plan
• 37 per cent to slash food /utility budgets to pay festive debt

New research from Post Office Christmas Club has revealed that for more than 14 million people (29 per cent) the cost of Christmas shopping, entertaining and socialising has resulted in increased stress over finances.

Worryingly, of the almost five million people (10 per cent) who had to increase their debts to cover Christmas, over a third (37 per cent) are going to have to make cut backs on essentials such as food and utility bills in order to repay debts. Whilst almost half (49 per cent) stated they’ll be cutting back on going out throughout the year.

Although the same number of men and women (29 per cent) are stressed over Christmas expenditure, it seems that many men will be placing their heads in the sand when it comes to dealing with the extra debt – 15 per cent said they have no idea how they are going to make repayments compared to just four per cent of women.

When it comes to cut backs, 48 per cent of women will be making savings on household spend, in comparison to 28 per cent of men. And although January may traditionally be a peak period for holiday bookings, a third of women (34 per cent) who incurred Christmas debt say that spend on holidays will have to be reduced in 2010, though only a quarter of men intend to do the same.

The Post Office Christmas Club research also revealed a reduction in the number of people who budgeted for Christmas in 2009 – 27 per cent said they saved up in advance to cover costs, compared to 33 per cent who saved for Christmas 2008.

This approach has also been echoed by Post Office Christmas Club customers who, because of the recession, said they felt they would not have enough spare cash to save towards Christmas 2009. As a result, the Post Office reduced the minimum pre-payment for the Christmas Club from £5 to £2 to help people take that first step towards saving for Christmas.

With one in ten people still expected to paying off Christmas 2009 debts come Christmas 2010, and the same amount carrying the debt taking them into 2011, the Post Office Christmas Club is advising that now is the time to start planning this years festive season.

Michael Birchall of Post Office Christmas Club said: “Although Christmas 2009 may already feel like a distant memory to many, for millions of people debt and financial worries will be a constant reminder in the months and even years to come.

“People may not feel ready to start thinking about the 2010 festive season but now really is the time to consider saving through schemes such as the Post Office Christmas Club. We know cash is tight for many so we’ve made it even easier to save by reducing the minimum payment to £2. Savings are locked away until 1 November to avoid temptation and helping to avoid a Christmas debt hangover well past the 2011 New Year celebrations.”

Suzy Hall from the Christmas Prepayment Association commented: “It’s especially worrying to see that even less people budgeted this year to cover the costs of Christmas. Savings clubs such as the Post Office’s offer people real flexibility to put away a little cash each week or month to ensure they can celebrate Christmas without the worry of increased debt and stress to follow.”

The Post Office Christmas Club offers an easy way to budget for Christmas 2010. Customers receive a special Christmas Club payment card, onto which they can make pre-payments from just £2 over the counter at any Post Office branch. From 1 November the card is unlocked, enabling customers to use it to buy goods and services directly at retailers, or to purchase retail gift cards. The maximum individual payment is £500, up to a total of £1,000 per card per annum.

Each club member receives a great bonus booklet of special offers with selected retail partners – a significant benefit compared to current rates available from high street savings accounts.

source: Royal Mail