What is the best Christmas present you can give yourself this year if you are in problem debt?

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By Andy Lymer, Professor of Accounting and Taxation and Director of the Centre on Household Assets and Savings Management (CHASM) at the University of Birmingham

The UK’s Money and Pensions Service estimates 8 million of us will face problem debt – debt they don’t know how we will repay – by the end of 2021. If you are one of those, what would be the best Christmas present you can give yourself this year?

But you don’t need me to tell you that this has been a really bad year for personal finances for many in the UK. In September this year, the average total debt per household in the UK was more than £60,000 with average credit card debts per person of more than £2,000. In total people in the UK owed £1,685 billion. With these levels of debt it is perhaps not surprising that one person was declared insolvent or bankrupt this autumn every 5 minutes!

For many, this year has entailed long periods of furlough. In May, nearly 9 million of 33 million workers in the UK were part of this scheme, and many of these have had to deal with a cut in pay of 20%. Many are still on this scheme now – with the news announced this week that this scheme will go on at least until April 2021 for some – more than a year since it started!

For a significant number of others, this year has created even more dramatic financial upheaval. In October, nearly 1.7million people were unemployed and this is predicted to keep rising to perhaps 2.6 million by the middle of 2021. Lots of these have become newly financially vulnerable and are experiencing ‘signing onto’ Universal Credit (UC) perhaps for the first time in their lives. There are 1.4 million new UC claimants since March – more than doubling the number getting the main unemployment benefits.

And now we face Christmas – a time of the year many usually want to ‘push the boat out’ for family and friends and to indulge in a social celebration. How can this be achieved when resources are stretched so thin, or where there is a desire to hold on to what little savings we may have in case the promised end to the COVID-19 storm doesn’t come quickly with a vaccine roll out, and more economic pain is still to come as many suggest it will.

Of course, we may have more limited opportunities to spend money at than usual as so many places we might visit this time of the year are shut – pubs, restaurants, Christmas party venues and the like. Not even panto will survive this year – at least not live – and it just isn’t the same experience shouting ‘it’s behind you’ at a screen!

Should we dip into our savings (if we have any) to make a splash to cheer us up? What if we are already in debt? Just add some more? Almost certainly going into debt or extending debt we already have, if we don’t know how we will pay it back, is a bad idea – even after such a tough year.

If you are already facing debt that keeps you up at night, it is likely that it won’t go away by itself. Do something about it – you are very rarely the only one affected by being in debt – and make a phone call to someone who can help this year before Christmas to begin the process of getting some of this burden relieved.

Debt counsellors can often create amazing results if asked for help. Payment plans put in place, and even debts wiped out, giving people their lives back, new structure and direction added back to people’s financial lives that have become a huge burden perhaps for many years. This will not only improve your financial position, but evidence strongly suggests your health and self-esteem will result too. Why not give yourself that Christmas present this year if you face problem debt? It’s a gift that will be way more valuable to you, and those around you, than anything you can buy yourself or them – and will keep giving way into the New Year long after toys are broken or the latest gadget has become obsolete!

For help, you can call or visit:



The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the University of Birmingham.

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