Social spending deepens UK debt crisis
There is no escaping the fact that more people than ever in the UK are struggling with debt. It is well-known that the rise in living costs and stagnation in wages is seeing an increasing in the number of families struggling to meet monthly bill repayments. Those that are able to pay their bills are often left with nominal sums of disposable income, which increases the chances of them spending money they do not have in order to fund their social activities.
This final point has been the subject of discussion recently, following the results of a survey that revealed half of all adults blame the demands of their social lives for getting into debt. The government-funded research has pinpointed ‘social debt’ as a growing problem, which is being driven by a fear of being perceived as tight by friends. It claims the average social debt among adults now stands at £1,260, with more than half of people revealing they spend more than they budget for on social occasions.
The difficulty in keeping track of how much we spend when in social situations is understandable, when you consider that we often participate in rounds when we go to the pub, or split bills equally in restaurants even when we may not have spent as much per head as the rest of the group. The findings of the survey appear to bear this out, with two out of three people saying they spend more on a round of drinks than they get back, and a third of those questioned admitting they lose out when settling a group tab after eating out.
Worryingly, it seems the propensity for overspending on lifestyle choices has extended to significantly more expensive activities. One in six disclosed to researchers that they go on holidays they cannot afford. The idea of using credit cards to pay for holidays is not new and a lengthy 0% interest on purchases agreement can be a handy way of spreading the cost of a holiday as opposed to paying for it in one lump-sum. But if you’re using credit to pay for seven days in the sun and it’s simply adding to debt you cannot pay off, it will only worsen your situation.
Social spending should be the one of the first things you review if you are struggling with debt. The importance of being honest with friends and family about your financial situation is critical if social debt is not to get out of control, as is the need to seek help if things have already got to that point. For more information and to get free and independent advice on debt management, contact CTAS today.