Half of us will have to borrow to fund festive spending, survey finds

Despite one in three people believing they are better off in the run-up to this Christmas than last, more than half will still have to borrow money to cover their festive spending.

And while it will take the average consumer 8.5 weeks to recover from over-spending at Christmas time, as many as 6% of us will take six months to get back on track and 4% will take nine months or more.

The results of the Irish League of Credit Unions’ annual Christmas Spending Survey indicate that while more of us find ourselves in a better place financially in the run-up to December 25, a large number will still struggle to meet the significant cost this time of the year brings.

Of the 1,000 adults around the country who took part in the ILCU survey, 30% admitted money worries could spoil their Christmas, though that was down from 33% in the 2013 survey.

Three quarters of respondents admitted managing their household bills and expenses is much harder over the Christmas period, with 51% struggling to heat their home, 40% struggling to manage their utility bills, 39% struggling with the mortgage/ rent, and 35% struggling with food costs.

There was a welcome drop in the percentage who said they will really struggle to give their families a happy Christmas, down from 10% at the height of the economic crisis in 2011 to 5% this year.

Nonetheless, with just 36% of people saying they will have sufficient money in their monthly income to pay for Christmas — down from 40% in 2013 — and 51% saying they will have to borrow to cover the festive period, ILCU is keen to discourage those in need from turning to moneylenders.

Its survey found 6% of people have approached, or will consider approaching, a moneylender to borrow for Christmas. That percentage rose among young adults to 9% for those who had done so and 8% who were now considering so.

Ed Farrell, ILCU acting chief executive, said it was worrying to see that was an option being used availed of by so many people.

“We would echo warnings from the Central Bank last week about avoiding high-interest rate moneylenders,” said Mr Farrell.

“Using a moneylender can result in consumers getting trapped in a cycle of debt which can be hugely difficult to break free of. If you feel that you need to borrow, speak to your local credit union first.”

Of those who told ILCU they were borrowing to fund Christmas, the average amount sought was €417, up from €410 in 2013.

Meanwhile, the survey showed that even though most of us (71%) believe we, as a nation, spend too much on Christmas, the amount we are willing to splurge is still rising.

Respondents said they will spend, on average, €600 this Christmas compared to €590 last year, with men appearing more willing to loosen the purse strings.