‘Black Christmas’ predicted as 12 million Britons cut credit card spending
-High Street to be worst affected as 1 in 4 (25%) will avoid credit cards in next 6 months-
(London 1/11/07) 1 in 4 Britons will avoid credit cards this Christmas, with 15% of adults still struggling with over £10,000 in unsecured debt. That’s according to the latest quarterly research released today by leading debt consultancy, Thomas Charles.
As personal debt in England hits over £1.3 billion, consumers have revealed to Thomas Charles and YouGov that they now intend to combat their money difficulties, and how.
When questioned on their attitudes to spending, credit card repayments were highest on the agenda for 35 to 44 year olds, 30% of whom intend to cut their card spending.
42% of 18-34 year olds planned to scale down their usual ‘entertainment’ spending over the Christmas period this year- a bleak statistic for bars and restaurants for whom the festive period is a crucial one. 1 in 10 Britons (8%) will think twice before making large purchases on credit in the next sixth months, as they intend to save by avoiding personal loans. This has obvious implications for the travel, home improvement and car industries.
Further evidence that Britons are taking their personal debt situations in hand is the statistic that 1 in 10 will take on a second job or increase their earning potential to clear their debts as quickly as possible.
Men continue to be more indebted than women, with 27% reporting unsecured debts of at least £5,000, compared with 22% of women. This may change, however as this research reveals that men’s attitudes to money have been more shaken by the personal debt crisis than women (17% to 15%).
Scotland remains the area with the highest proportion of indebted residents in the UK, with almost 3 in 10 (28%) reporting unsecured debts of £5,000 and over. The North is no longer the region most free of debt- this title has been taken by the South (excl. London) where 21% owe £5,000 and over. 24% of Londoners owe £5,000 plus, and 16% owe over £10,000.
James Falla, Managing Director of Thomas Charles, comments on these results:
“The personal debt situation in Britain has reached breaking point, and recent personal banking instability has brought debt to the forefront of the agenda. Interest rate rises and subsequent mortgage hikes mean that people have been relying on credit for their everyday expenditure- credit which they can often ill afford. These results show that Britons are finally making positive steps towards confronting the amount of debt they are carrying. This is good news for the man on the street, but may signify bad news for retailers who have come to rely upon the vast amounts of credit spent at Christmas time. There is still a massive debt mountain for Britain to climb, but this report signifies that the bad news about debt is finally sinking in.”
Consumers wishing to contact Thomas Charles for advice on debt can do so via the company’s website (www.thomascharles.com) or by phone on 0800 072 5988.
CONSUMER DEBT:
Key stats
15% of Britons in serious debt (£10,000)
Men are more indebted than women overall, but their attitudes are changing
1 in 4 Britons will avoid credit card spending this Christmas
Top tips
Don’t bury your head in the sand. Try working out your financial position using a budget sheet detailing all your incomings and outgoings.
Consider transferring credit card debt to a 0% card while you deal with more pressing bills, such as any council tax or mortgage payments. But don’t use this as an excuse to run up more debt elsewhere, and beware of hefty transfer fees.
Don’t take out other loans to pay off the original debt or use a consolidation loan. If you must do this, be disciplined and don’t use the new loan money for anything else.
Talk to your creditors about structuring a realistic repayment plan.
If you cannot do a repayment plan and you do not want to go bankrupt then try an IVA. Visit IVA.co.uk or call the IVA helpline (0800 197 48 38).
If you want to consider bankruptcy then try the Citizens Advice Bureau (citizensadvice.org.uk)
If mortgage rate rises are a problem, try working out how the interest rate rise will affect your mortgage using a rate rise calculator like the one on http://www.iva.co.uk/MortgageCalc.asp or http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
Useful contacts
CAB: www.citizensadvice.org.uk
IVA Helpline: 0800 197 48 38 www.iva.co.uk
Bankruptcy Help Website: www.bankruptcyhelp.org.uk
The Insolvency Practitioners Association: www.insolvency-practitioners.org.uk
- Ends –
About Thomas Charles & Co Ltd
Thomas Charles & Co Ltd was set up in 2004. The Joint Managing Director, James Falla has 7 years experience in the insolvency and debt management industry and was involved in the set up of debt help specialists, Brookvale Group PLC, listed on PLUS Markets (formerly OFEX) since 2001.
Thomas Charles operates throughout England and Wales with its head office in Acton (West London). It has a personal, consultative approach to debt management. It focuses primarily on providing formal solutions for debt problems including Individual Voluntary Arrangements and Bankruptcy. However, it will also provide advice around informal debt repayment plans where appropriate. It works with third party Insolvency Practitioners around the UK.
About James Falla
James Falla has advised people who have personal debt problems since 1997. During this period he has helped 1000’s of people through the IVA process and worked with many others who have decided to undertake both Bankruptcy and informal Debt Management Plans.
James co-founded Thomas Charles (www.thomascharles.com) with William Berry in 2004 with the objective of providing clear impartial advice and solutions for people in serious debt. James has made numerous TV and radio appearances, including BBC1 News, BBC News 24, and Wake Up To Money
Notes to Editor:
All research was commissioned by Thomas Charles and Co and conducted by YouGov Plc.
October 2007 Survey: Total sample size was 1,818 adults. Fieldwork was undertaken between 29th- 31st October 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Population figures based on UK adult population of 45,731,000, according to ONS population data.
July 2007 Survey: Total sample size was 2,115 adults. Fieldwork was undertaken between 16th - 18th July 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Population figures based on UK adult population of 45,731,000, according to ONS population data.
April 2007 Survey: Total sample size was 2,274 adults. Fieldwork was undertaken between 17th - 19th April 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
January 2007 Survey 1 (*): Total sample size was 2,315 adults. Fieldwork was undertaken between 9th - 11th January 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
January 2007 Survey 2 (**): Total sample size was 2,740 adults. Fieldwork was undertaken between 18th - 22nd January 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
October 2006 Survey: Total sample size was 2,322 adults. Fieldwork was undertaken between 11th - 13th October 2006. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
April 2006 Survey: Conducted online and fieldwork took place from 29th March, 2006 to 3rd April, 2006 and comprised an Omnibus followed by an in-depth survey on 1336 adults.
Further statistics and tables are available on request.
