Brits spend over £1bn on Valentine’s Day gifts
Valentine’s spending has increased by 0.5% since last year and has rocketed in recent years. However FairMoney argues that this spending may be going on credit as the country struggles to pay its bills.
It showed that 18% of Brits have debts valued at over £2,000. Around one-fifth need an extra £100 a month just to keep up with their bills and repayments – for 6%, that rises to more than £500. In aggregate, Brits need an extra £3.8bn to cover their normal monthly expenditures
Dr Roger Gewolb, executive chairman and founder of FairMoney, said: “Brits are in a whirlwind of debt and this is only exacerbated further by retailers luring in consumers with Valentine’s Day deals. With such pressure from retailers, it’s not surprising that consumers turn to payday lenders and credit cards to battle the financial burden. Short term finance is bleeding us dry and millions of people are being pushed to extortion at the hands of high-interest credit options – one of the biggest atrocities to affect UK society.”
The Financial Conduct Authority’s (FCA) recently announced that more than 5.4 million loans were taken out in the year to 30 June 2018. At the same time, high cost short-term credit is also accelerating, though price caps are helping to keep borrowing costs lower. Nevertheless, these people pay an average of 1.65x the original amount borrowed.
Gillian Guy, chief executive of Citizens Advice, said at the time that many of these products were taken out by those with little choice but to borrow to meet the cost of essentials, often leaving them heavily in debt after taking out small loans.