Britons are falling short when it comes to saving for Christmas, new research has said.

A Barclaycard study has found 44 per cent of Britons do not put any money away ahead of their pre-Christmas spending sprees and Citizens Advice (CAB) noted this can cause consumers problems.

A particular issue it saw as significant is that fact that 54 per cent of consumers plan to spend as much this year as last and seven per cent intend to increase their outlay, despite 31 per cent admitting they could not pay all their bills in January.

Joining forces to warn about the potential debt consequences of such actions, the two bodies issued suggestions to consumers to budget better over the holiday period.

Barclaycard's head of public and community affairs Alan Ainsworth said: "It is essential to plan and budget in advance to make sure you aren't caught short when it comes to paying for bills and other expenses."

And CAB chief executive Gillian Guy said each January sees "a spike in enquiries from people who are struggling to keep on top of bills and debts due to overspending throughout the festive period", which wise spending and budgeting can help to prevent.

Issuing advice last week to those who do get into post Christmas-debt, the Finance and Leading Association said consumers who are in difficulty with their debt repayments should contact those they owe money to as soon as possible to find a way to re-schedule them.

It advised against taking on further credit as a means of postponing the problem.

Posted by Paul Thacker
 

Unsecured consumer credit borrowing saw a decline in the year to September 2011, according to new figures.

The Finance and Leasing Association (FLA) statistics for the 12-month period found that the overall level of borrowing issued by its members was one per cent less than that supplied in the 12 months to September 2010, at £52.776 billion.

Of this figure, £32.775 billion was accounted for by personal loans and credit cards, with this also falling by one per cent.

Larger reductions included nine per cent drops for store instalment credit and second mortgage lending, while storecard lending plummeted by 20 per cent.

The latter figures may be due to the high level of interest charged on some cards, as well as lower consumer spending in the shops.

Car finance was one form of credit to buck the trend, with lending up two per cent.

Reflecting on the overall situation, FLA head of consumer finance Fiona Hoyle remarked: "September's consumer credit borrowing shows a slight improvement on last year, but not on the High Street."

Those keen to lower their credit card debt will be in good company, as the FLA figures are not the only ones produced recently to indicate consumers are looking to get a grip on their borrowing.

For many months now the Bank of England's monthly Trends in Lending report has shown consumers are paying off more from their cards and other lending than they borrow and in the latest case, figures for October showed no growth in consumer credit lending.

This was in contrast to a rise of £0.6 billion in September and £0.4 billion in August.

By James Francis
 

A eurozone recession is likely to send the UK economy back into a state of contraction, chancellor George Osborne has admitted.

Delivering his autumn statement in the House of Commons, Mr Osborne noted that the Office for Budget Responsibility is not forecasting a recession, but has slashed its growth forecasts to 0.9 per cent for this year and 0.7 per cent for 2012.

And, he noted, this prediction is based on the assumption that the eurozone finds a solution to its own crisis, with a "much worse outcome" for the UK if this does not happen.

He said: "If the rest of Europe heads into recession, it may prove hard to avoid one here in the UK."

This stark warning may be the first acknowledgement of a potential situation that may see Britain face not just a recession, but more public and private debt, lower growth in the longer run and with it more people out of work and unable to pay their debts.

Those who do get into such a situation may benefit from having a debt management plan in place, to spread their repayments over a longer period.

Meanwhile, Mr Osborne announced some measures aimed at helping hard-pressed consumers, such as reducing the amount rail fares can be raised by to the retail price index plus one per cent – instead of three per cent – and cancelling the 3p rise in fuel duty due in January.

The low forecast for economic growth comes despite the Office for National Statistics confirming last week that economic growth was 0.5 per cent in the third quarter of this year.

Posted by Paul Thacker