Revealed: How the cost of living is stealing Christmas!

Revealed: How the cost of living is stealing Christmas!

A recent YouGov survey, commissioned by the charity StepChange, has revealed a concerning situation in the United Kingdom: one-third of families with children are facing severe financial difficulties ahead of this year’s Christmas expenses. This survey, which involved over 2,000 adults, has shown that approximately 8% of the population, or around four million people, are planning to rely on credit to cover holiday expenses.

The StepChange report comes in the context of constant pressures on household budgets, amplified by two years of rising living costs. Despite a recent easing in the inflation rate, families continue to struggle to keep up with daily expenses. The British Retail Consortium (BRC) has further alarmed the public, suggesting that the pace of retail price increases could accelerate in 2024 due to new challenges that businesses will face.

Vikki Brownridge, CEO of StepChange, has highlighted the particular pressure that families with children feel during the holiday season. The need to create special moments and memories with loved ones can push these families to spend beyond their means, opting for credit to cover such expenses. Brownridge has emphasized that, given the high inflation of the past two years, the misuse of credit during Christmas could lead to serious debt problems in the new year.

The survey also revealed that a quarter of respondents are afraid they won’t be able to cover the extra expenses during the holiday period. Furthermore, approximately 2% of the population, equivalent to around one million people, have stated that they will forgo celebrating Christmas due to the high cost.

Recent data from the BRC and NielsenIQ indicate a reduction in food price inflation, dropping to 7.8% in November from 8.8% in October. However, despite this decrease, the BRC has expressed concerns for the coming year. The government’s autumn statement has been termed a “betrayal” to businesses, potentially disappointing expectations for a more favorable economic environment.

Helen Dickinson, CEO of the BRC, has reiterated these concerns, highlighting the ongoing commitment of retailers to ensure an affordable Christmas for customers. However, she has underscored the new challenges that the sector will have to face in 2024: increases in business taxes, hidden costs for compliance with new regulations, and a significant rise in the national minimum wage. These factors could slow down or even reverse the progress made so far in containing inflation, particularly in the food sector.

In conclusion, as the United Kingdom prepares for the holidays, many families are facing a challenging economic reality. The increasing reliance on credit, the pressure of Christmas expenses, and the uncertain economic prospects for the new year outline a landscape of challenges that require attention and targeted interventions both from the government and the private sector.