A new study from Norwich Union reveals that the average Brit is likely to run out of money today, and has renamed January 9 as 'No Pay Day'. The company believes people's failure to juggle finances over Christmas and the New Year combined with early December pay dates will have caused many to run out of money almost before the year has begun.
Its research suggests that more than 40 million people will run out of money by today and will be forced to either dip into savings or rely on credit or get a loan
to bridge the gap until January pay day. While 43 per cent of respondents claim January is the most stressful time of the year for finances, a worrying 19 per cent do not even expect to have enough cash to pay this month's household bills.
Finance expert at Norwich Union Cesarina Holm-Kander said: "To find nearly half of Brits know their monthly salary won't cover the cost of Christmas and New Year is truly shocking."
The company found that, on average, people spend an extra £781.86 over the festive period, including £379.81 on gifts, £113.88 on socialising and £45.83 on travel. And 35 per cent of people think finding themselves in debt in January is unavoidable. Those in the 16 to 24 age bracket are twice as likely to overspend as their parents, according to the study.
While 19 per cent of people will use overdraft funds to bail them out, 16 per cent will rely on credit cards
, 14 per cent on savings and four per cent will ask family and friends for help.
The group suggests that simple measures, such as re-evaluating finances and working out a budget could help to regain control and to avoid a repeat next year. Another tip it offers is to open up a new account and pay a small amount in each month by direct debit to help budget for next Christmas. Head of marketing and communications, Paul Stokes, said: "Everyone wants to have fun and enjoy the festive period but a little planning could mean people start the year with a little less financial worry."
Figures from the Department of Work and Pensions back up the Norwich Union study. It found that more than half of people in the UK (55 per cent) spend beyond their means over Christmas. Its survey found that Londoners and people in the East Midlands were best at budgeting for the festive period while those in the North East are most likely to over spend. "Struggling to pay the bills after Christmas is a situation that many people find themselves in and it can be very stressful," commented personal advisor at Jobcentre Plus, Susan Clark.
© Fair Investment Company Ltd