One in 10 Brits Will Be Paying Off Their Christmas Bills until June 2025
A new survey by credit management company Lowell has highlighted the financial strain the festive season places on families across the UK. The findings show that almost three-quarters (74%) of households rely on credit products like Buy-Now-Pay-Later schemes and credit cards to manage Christmas expenses, with repayments stretching into mid-April.
The average UK family is set to allocate over half (53.6%) of their monthly salary—approximately £1,546 based on the national average monthly wage of £2,886—to cover the season’s costs. Alarmingly, 15% of families anticipate it will take six months or more to pay off their festive debts.
Adding to this challenge 72% of parents believe their children are likely to mirror their financial behaviours. With this in mind, Lowell has partnered with financial charity MyBnk to share some top tips on how to set a positive example over the festive period.
How are UK families funding their festive spending?
Overall, the data reveals that many UK families are planning to stay within their financial means this Christmas. Spending an average of 53.6% of their monthly salary, equivalent to approximately £1,546 based on the UK’s average monthly income of £2,886. However, while the majority aim to budget carefully, 18% of respondents anticipate spending 80% or more of their income on festive costs, which could leave them struggling to cover everyday expenses and priority bills.
Despite these efforts many households are turning to credit products, such as Buy-Now-Pay-Later schemes and credit cards, to spread the financial costs of gifts and celebrations. This year, 74% of families say they will rely on credit to cover their Christmas expenses. Usage is notably higher among younger adults aged 25-34 (87%) compared to older generations aged 45-54 (58%).
On average, families estimate it will take 3.8 months—stretching into mid-April—to pay off these expenses and 15% of respondents predict it will take six months or longer to fully clear their festive debts, Highlighting the long-term impact of festive spending on household finances.
How do festive spending habits affect children?
The festive season often brings heightened consumption, making spending habits more noticeable. When surveyed about the financial behaviours they observe in their children, parents identified several patterns.
Encouragingly, 61% of parents reported that when they modelled budgeting habits, these behaviours were reflected in their children. Similar trends were noted for price shopping (49%) and couponing (28%). However, less desirable behaviours such as impulse buying (21%), retail therapy (20%), and overspending on non-essentials (16%) were also reflected in their children’s habits.
| Financial behaviours children mirror from their parents | Percentage |
| Budgeting | 61% |
| Price shopping | 49% |
| Couponing | 28% |
| Impulse buying | 21% |
| Engaging in retail therapy | 20% |
| Overspending on non-essentials | 16% |
These findings highlight the importance of parents being mindful of their own spending habits during the Christmas period, as they can have a lasting impact on their children’s financial attitudes. Highlighting the broader implications of festive spending, financial education charity MyBnk noted:
“It is well-researched and documented that children learn through role models and mimicking behaviours that they see demonstrated, particularly by those closest to them such as their parents. It is of little surprise then that parents’ financial habits can impact the behaviour of their children with money. Reports by organisations such as TSB and MaPS have found links between parents’ financial habits and an impact on their children – whether that be a willingness to talk openly about money matters or their children replicating their impulsive spending behaviours.
The festive season is synonymous with overindulgence and overconsumption. Social media becomes awash with parents showcasing mountains of presents and consumerism, often followed by posts in January about managing credit card bills, tightening belts or spending in the sales to get ahead of the curve for next year. This ‘yo-yo’ spending and saving culture can have a negative impact on children and young people”
How can parents foster positive financial habits over the festive period?
To help parents encourage positive financial habits during the festive season, Lowell has partnered with children’s financial charity MyBnk to share effective strategies for avoiding overspending behaviours in children.
A spokesperson from MyBnk explained:
“The Bank of England reports that we spend 29% more in December than other months which is a significant addition to most families’ budgets. For some, this is done through saving and careful planning whereas for others it might be overspending. Modelling positive behaviours for our children is always the best option, however nobody is perfect. When parents can’t do this, having age-appropriate conversations about feelings of regret or what would have been a better strategy can offer young people a way to understand the good and bad money decisions we make.
“Do you remember writing a wish list as soon as the festive season came around? Circling toys in the Argos catalogue? You can still encourage your children to do this, but get them to write down costs of each item and set them a spending limit. Encourage them to make decisions based on a set amount and budget for the items they would like.
“Equally, you could get them to write a wish list and include reasons why they want the items. Getting them to think through their motivations can help them decide what is most important to them and bring home the fact that maybe the cost isn’t the most important factor. By encouraging children and young people to make choices about these items they are learning lifelong lessons about budgeting, needs and wants, and future financial planning!”
Commenting on the research John Pears, CEO at Lowell said “As children are increasingly exposed to consistent advertising, whether that’s on TV, or through social media adverts, this can deliver an increased expectation of Christmas gifting and spending. Our data has shown that the behaviours parents exhibit to their children can have a significant impact on their children, so it’s important to foster these positive financial habits, to set them up for the future.
“With 74% of parents paying on credit for their Christmas period, it’s important that you assess the affordability of making repayments. It’s worth involving your children in conversations around gifting to help manage their expectations around financial spending, as well as fostering positive financial savings habits.”
We’d encourage anyone feeling financial pressure to reach out for support. A list of organisations who can help is available at https://www.lowell.co.uk/help-and-support/independent-support/