Christmas debt appears to be as traditional as Christmas pudding. A study reveals that nearly a third of consumers believe debt is essential to fund the holiday.
The research, by financial technology specialist Intelligent Environments, has found that 31% of consumers believe getting into debt is “essential”, while a quarter believe that they will miss at least one repayment and incur a late fee as a result of Christmas.
“Our research shows us that nearly half the UK population estimates they will go into debt to pay for Christmas this year,” said David Webber, Managing Director of Intelligent Environments. “This is a figure which could be dramatically reduced if banking customers were given advice, training and access to money management tolls. Regulated by the FCA, banks are required to put customers first as part of their business strategy. This means that if evidence shows that customers need assistance with personal financial management, banks should strive to provide it.”
Indeed, the report suggests that these figures could be partially amended if customers had greater access to digital options when managing their accounts. It claims that 59% of people would like to manage their finances online, and 54% would repay larger amounts of their debt if their bank provided them with a financial management tool that was linked to their bank account.
As such, Intelligent Environments is calling for more banks to give customers access to digital budgeting tools to improve their money management capabilities.
“Customers need to be given more transparency and structure on the management of their finances,” Webber continued. “This will enable them to manage their money better, ultimately cutting down on the level of debt that current exists, hopefully providing them with skills to prevent them from going into the red in the future. We live in an increasingly digital world, and banks need to ensure their customers have access to the tools they need to manage their money in a quick, easy and stress-free way.”