6.5 Million Brits Struggle with £5 Billion Christmas Debt

14 January 2015

  • Over 1 in 10 (13 per cent) Brits ran up average debts of more than £750 to pay for Christmas
  • 38 per cent think debt collection strategies are ‘very distressing’
  • 32 per cent believe they would be better able to manage debt online rather than dealing with debt collectors face-to-face

Brits racked up an estimated £5bn of debt this festive season1, according to research by Intelligent Environments, the leading digital banking software provider. The online poll of 2,000 Brits found that over one in ten of us (13 per cent) ran into average debts of more than £750 to fund Christmas.

17 per cent even admitted to incurring late fees at Christmas for failing to make payment on debt on time.

Intelligent Environments’ research also reveals four in ten (38 per cent) people find current debt collection strategies, such as phone calls and threatening letters, ‘very distressing’, with 16 per cent saying they have purposefully avoided phone calls chasing payments. Moreover, a third of people (32 per cent) say they would rather manage their debt online in order to view current debt levels and identify when this money can be paid back without the pressure of being hounded by calls and letters.

David Webber, managing director at Intelligent Environments said: “It’s clear Christmas is a financially challenging time for many people and their families and current outdated debt collection tactics aren’t helping things. Allowing customers to manage their debt online would be a much less stressful and easier option and allow people to repay their debt in the way which suits them best.”

Webber continued: “Digital tools can increase visibility of debt, and provide additional flexibility over repayments. That puts control over debt back in customers’ hands. Intelligent Environments’ Interact® Collect addresses this. This is a digital debt collection and recovery solution, catering to financial services organisations and debt collection agencies, amongst other institutions. The platform enables people to log on to a personalised portal to view and settle their debt on- line, and on their mobile and tablet anywhere, anytime.

“It includes a variety of tools, such as a budget calculator, and offers a variety of payment and management options, from a direct total payment, partial payments, the ability to set up a payment plan and a “promise to pay” option which allows people to delay a payment by committing to a future date and a minimum payment amount.”

Ana is a 25 year old professional from London who has experienced trouble with debt and who believes a digital tool for managing repayments would have made Christmas 2013 far less stressful. She said: “Christmas is the season of giving, but finding and buying the perfect presents for my friends and family was an expensive affair. I ran up debts of around £1,000, which took me a long time to pay back, and left me at the mercy of the collections agency in charge of recovering the money. The company made numerous calls to both my mobile phone and my place of work, and also sent some scary letters requesting repayments.

“While I understood that I had to repay the debt, the tactics for recovering it were extremely distressing. It meant Christmas left me with a bitter taste in my mouth. A digital tool I could have logged in to and used to manage my repayments would have given me the feeling of control that I felt I lacked when being hounded by the collections agency. I also think it would have encouraged me to increase my repayments and escape from the shadow of my Christmas spending sooner, as I would have been able to see how repayments balanced against my monthly budgets and adjust them accordingly.

“This Christmas I wanted to do everything I could to avoid going through the same experience with debt collection companies. I significantly cut back my spending on presents and instead worked to very tight budgets, meaning I wasn’t quite able to get everything I wanted but at least I won’t be getting calls from angry collectors.”

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