Why today is the poorest day of the year
A payday gap of up to 45 days between December and January means that millions of Brits will hit a financial crisis today, according to price comparison site uSwitch.
Compounding the effect of the lengthy gap between paydays, is the fact December is the highest spending month of the year – with people spending 33% more than any other month – while inflation hitting a two-year high is also taking its toll.
The result, according to uSwitch, is that 32% of Brits are concerned they won’t meet all their financial commitments this month. For those aged between 18-34 this figure jumps to 43%.
Meanwhile £11bn was put on credit cards in the run-up to Christmas and the research revealed that one in 10 think they will fall behind on their repayments. Additionally one million homeowners said they could default on their mortgage repayments this year.
The research showed that it will take the average consumer between one and two months to recover financially from the December spending burden. However, for two million Brits it will take until the summer of this year to get over their debt hangover.
“It’s vital that people take action now before their debts spiral out of control and it becomes even harder to get on top of your finances,” said Tashema Jackson, a money expert at uSwitch.
“If cutting your outgoings isn’t enough and you are relying on extending your borrowing, shopping around for the best deal is key – don’t get taken in by the first offer you see. Making sure your credit score is in good shape can ensure you are eligible for the best deals, if you need to rely on extra credit. You can do so with some straightforward steps, such as making sure you are on the voting register and applying for only one credit card or loan at a time.”
Jackson added that searching for the best deals on energy, broadband, and insurance can also help cut your spending in the new year and save you over £1,000.
“However, if you feel like your debts are unmanageable help is at hand. Charities like StepChange offer free and impartial advice to assist you in getting debt under control.”