To help combat the January spending hangover, uSwitch.com has teamed up with financial expert Cesarina Holm Kander, presenter of Channel 4s Your Money or Your Wife.
The aim is to develop some practical tips on how to recover from the
January blues and h to take control of your finances after Christmas over spending.
Holm Kander says: Christmas is a difficult time for everyone as we feel the
obligation and desire to spend more and more.
There are some common pitfalls that people should do their best to avoid.
“Perhaps the worst offenders are store cards and credit cards, which prolong the spending hangover with extortionate rates.
To get the best deal, shopping around to compare cards and introductory offers is essential – the average interest rate on credit cards is currently 15.9% APR, around 11% above base rate.
“Its also important not to fall into the minimum repayment trap as so many
people do currently 3.4 million credit cardholders in the UK regularly
make only the minimum repayment, this could extend their debt sentence on
their credit card to 24.5 years.
Nick White, director of personal finance at uSwitch.com says: The impact of
the January financial blues is not restricted to the poorest families.
“With Britains personal debt levels increasing by 1m every four minutes,
it is clear that consumers need to take some personal responsibility and
carefully manage their own financial situation.
One person falls victim to insolvency every minute of theworking day – this is a 66% increase on the same quarter last year.
These trends highlight the need for basic money education for all and the
governments decision to educate young people on personal finance matters is a step in the right direction.
Ultimately, people must take responsibility for their own finances but the government has a duty to ensure consumers receive the right information, understand the choices open to them and are empowered to make good decisions, whilst being aware of the consequences if they dont manage their money effectively.
If the government is serious about tackling the 1,268bn mountain of
debt it must take immediate action to equip people with the right tools to
make the right decisions.
A report by uSwitch.com, has revealed that Wednesday January 17 is officially the poorest day of the year in the UK as households reach a cash crisis.
For more than 14 million households (57%), December is the most expensive month of the year, leading to a serious spending hangover in January.
It is estimated that the average family accumulates 18% of their annual
borrowing in December by spending twice as much as in any normal month.
With the UK debt-mountain piling ever higher, at 1.268bn, its no
surprise that the financial stretch is never more keenly felt than as we
face the traditional January pay day blues.
USwitch estimates that more than 5.3 million GB households (21%)received their December pay cheques one or two weeks early, meaning that the wait for payday increased from 30 to as many as 44 days.
The painful wait for pay day, combined with the knock-on effects of December spending (it is estimated that the average spend per household totals 579 at Christmas12) culminate in a potential liquidity crisis for millions on January 17 as the UK faces its Poorest Day.
Adding to the January spending hangover is the December increase in household bills, with costsrising across the board.
According to the research, the average monthly gas and electricity bill rose by 12% from 67 to 75, whilst average spending on home and mobile phones rose from 39 in an average month to 43 in the most expensive month.