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Budgeting call as households fear difficult January ahead

  • 11% of Britons (5.5 million) expect to fall behind with their finances this New Year
  • Only a third have a budget, and ‘perilously few’ have a plan to repay their debts
  • National Debtline calls on households to set a budget for 2017 and seek free advice early, as the charity prepares for its busiest January in years

More than a tenth of the adult population expects to fall behind on their finances this January, while less than a third have set a personal budget and ‘perilously few’ have a plan to repay the debts they currently owe, according to new research from National Debtline, run by the Money Advice Trust.

A poll of more than 2,000 British adults conducted online by YouGov for National Debtline found that 11 percent of Britons say they are likely to fall behind in January as a result of Christmas spending, equating to an estimated 5.5 million people.  Less than a third (32 percent) have set a budget that they try to stick to, and only one in eight (12 percent) have a plan for repaying any debts they currently owe.

The charity is expecting its busiest January in years this month, as households recover from Christmas spending – with its research suggesting that an estimated 2.5 million people are likely to look for advice about money or debt in the coming weeks.  The findings follow a Christmas period that a third of British adults put on credit, and a period in which household borrowing has increased significantly.

National Debtline and its sister service Business Debtline took an average of 715 calls a day in December, and National Debtline helped more than 40,000 people online during the month – making this Christmas period the debt advice service’s busiest in four years. 

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said:

“January can be a difficult month for household budgets – and it is easy to see how many people fall behind when the bills for Christmas spending begin to land.  Unfortunately our research shows that perilously few households have a plan for how to repay the debts they currently owe – and many could fall into serious difficulty as a result.

“At National Debtline we are expecting our busiest January in years for advice by phone and online.  I would urge anyone who is struggling to cope to seek free advice as early as possible – as the earlier you seek advice, the quicker and easier the problem will be to solve.

“This is also of course the month for New Year resolutions, and with fewer than a third of us having set a budget for our personal finances, resolving to set a budget for 2017 should be at the very top of the list.  For most people, setting a budget for income and expenditure is the single biggest step they can take to regain control of their finances and start to tackle their debts.”

National Debtline’s top 3 New Year’s Resolutions

1) Set a budget for 2017

Setting a budget is the single biggest step you can take to get on top of your finances.  Sit down and work out how much money you have coming in every month, and what you need to spend.  Don’t forget to account for annual expenditure, like car insurance or road tax, by dividing it through by 12. 

2) Open all of your statements

It can be extremely tempting to ignore those envelopes that land on the doormat – especially in January – but resist the urge to bury your head in the sand.  Ignoring the problem will only make it worse, so take a deep breath, open all of your statements and get a handle on how much you owe.  Write down a list of all of your debts, together with the outstanding balances and repayment dates for each.

3) Seek free advice early

Remember that you are not alone in this.  Free, independent advice is available from charity-run services such as National Debtline – so seek free advice as early as possible, and resist the appeals of commercial debt management companies whose high fees and charges will only add to your debts.  The earlier you seek free advice, the quicker and easier your problem will be to solve.

National Debtline offers free, independent and confidential advice 24 hours a day online at www.nationaldebtline.org and on 0808 808 4000, Monday to Friday 9am to 8pm, and Saturday 9.30am to 1pm.

 
© Money Advice Trust Charity Number 1099506
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