- 31 per cent of consumers say going into debt is essential to fund Christmas, and 44 per cent of Brits will go into debt to pay for their loved ones’ presents.
- More than a quarter (26 per cent) will miss at least one debt repayment and incur a late fee as a result, and half say going into debt is one of the biggest causes of stress at Christmas.
- Intelligent Environments is calling on banks to increase access to sophisticated digital budgeting tools to help people develop better financial management skills.
December 2015, London: Brits have been found to rely heavily on going into debt during the festive season, with one in three (31 per cent) consumers admitting to not knowing how they would pay for Christmas without incurring debt, a new study by financial technology company Intelligent Environments shows.
The festive season is known for shopping, and 44 per cent of consumers have stated they will go into debt to pay for this year’s Christmas presents. Additionally, a quarter (26 per cent) believe they will miss at least one repayment and incur a late fee this Christmas.
Christmas can be a stressful time as it is, and debt can compound the strain. Half (50 per cent) of Brits have said that going into debt is one of the biggest causes of stress at Christmas.
Enabling consumers to manage their finances digitally has been found to be one way to relieve this stress. According to Intelligent Environments’ research, 59 per cent of people would like to manage their finances online, and 54 per cent say they would repay larger amounts of their debt if their bank provided them with a financial management tool that was linked to their bank account.
In light of this, Intelligent Environments is calling for more banks to give their customers easier access to digital budgeting tools in a bid to prevent people going into debt. The company believes making money management easier throughout the year could make peak spending times such as Christmas more manageable. Therefore, banks need to equip customers with more accessible and user-friendly tools to manage their money online in a quick, easy and transparent way.
David Webber, Managing Director of Intelligent Environments, said: “Our research shows us that nearly half the UK population estimates they will go into debt to pay for Christmas this year. This is a figure which could be dramatically reduced if banking customers were given advice, training and access to money management tools. Regulated by the FCA, banks are required to put customers first as part of their business strategy. This means that if evidence shows that customers need assistance with personal financial management, banks should strive to provide it.
“Customers need to be given more transparency and structure on the management of their finances. This will enable them to manage their money better, ultimately cutting down on the level of debt that currently exists, hopefully providing them with skills to prevent them from going into the red in the future. We live in an increasingly digital world, and banks need to ensure their customers have access to the tools they need to manage their money in a quick, easy and stress-free way.”
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About the research
Online survey of 2,000 UK consumers undertaken by Censuswide in May 2015.
About Intelligent Environments
Intelligent Environments is an international provider of innovative mobile and online solutions for financial services providers. Our mission is to enable our clients to always stay close to their own customers.
We do this through Interact®, our single software platform, which enables secure customer acquisition, engagement, transactions and servicing across any mobile and online channel and device. Today these are predominantly focused on smartphones, PCs and tablets. However Interact® will support other devices, if and when they become mainstream.
We provide a more viable option to internally developed technology, enabling our clients with a fast route to market whilst providing the expertise to manage the complexity of multiple channels, devices and operating systems. Interact® is a continuously evolving technology that ensures our clients keep pace with the fast moving digital landscape.
We are immensely proud of our achievements, in relation to our innovation, our thought leadership, our industrywide recognition, our demonstrable product differentiation, the diversity of our client base, and the calibre of our partners.
For many years we have been the digital heart of a diverse range of financial services providers including Atom Bank, Generali Wealth Management, HRG, Ikano Retail Finance, Lloyds Banking Group and Think Money Group.
For more information visit www.intelligentenvironments.com