UK & World News

  • 23 January 2013, 13:12

Brits are getting 2013 off to a financially savvy start

CreditExpert /Experian


Getting better at managing money may be one of the most common New Year resolutions, but this year it looks like Britons really are taking it seriously.

This is because new research from Experian CreditExpert reveals Britons collectively cut the cost of their Christmas by 5.9 billion.

Although the average spent was 511, each of us saved a significant 182 through a little seasonal savviness - and consumers are set to follow this up in the coming year by repaying debt and finding ways to reduce expenditure on their day-to-day outgoings.

Bills, bills, bills

A quarter of Britons (23%) are already planning to cut their energy bills and a further 10% will be looking to trim their TV, broadband and phone subscriptions.

Indeed, a majority of those who incurred debt over Christmas (56%) believe they will have paid this off by the end of January 2013 - a month faster than in 2012, when 5% also still had Christmas debts the following December.

Shopping around

The study is a result of research among more than 1,000 people before and immediately after Christmas to give the most accurate snapshot of Britons festive and New Year's spending habits.

It reveals:
1. 25% of us simply gave fewer presents - and a frugal 5% none at all
2. Nearly one in 10 (8%) made presents for friends and family
3. 24% bought items throughout the year to spread costs
4. 27% used voucher sites and cash back sites to make their Christmas shopping more rewarding

Don't fudge the budget

Budgeting and financial planning also seems to have been a key difference between Christmas 2012 and the previous year. Although one in four Britons (26%) admits they didn't consciously plan to be more frugal this Christmas, this figure is down from 39% last year.

An impressive 38% consciously created a Christmas budget, with the majority either sticking to their budget (36%) or coming in under budget (16%) - up from just 21% and 8%, respectively, last year.

And it seems that many people may have been inspired to change their ways after a painful New Year last year. More than two fifths of Britons who went over budget last year (43%) said it made January 2012 a real struggle, with 10% having to borrow more money to make it through the month. As a result, 24% said it made them more determined to budget this time around.

Five steps for a New Year Credit Health Check

1. Begin with a budget If you do one thing this year, make a budget. Knowing what your actual outgoings are - and so how much you really have left over each month - is the first step to taking control of your finances.

2. Check your credit report Whether you are planning to apply for new credit or want to cut the cost of your existing borrowing, using a service like a free 30-day trial of Experian CreditExpert can help you work towards improving how you are rated by lenders, which can affect whether you get credit and how much you pay for it.

3. Review your bills Once you know your outgoings, spend an afternoon seeing if you could trim any of your bills. Experian CreditExpert has a unique service that can match credit products to your personal credit history to help you target the best deals you're likely to be accepted for.

4. Close your old accounts...but not too many If you have several credit or store cards, take some time to close down those you don't need or use any more. However, it may harm how you're rated if you regularly use too much of your available credit. Try to use no more than 30% of your overall available borrowing limit and avoid 'maxing out' any individual accounts.

5. Set up a Direct Debit payments for your credit cards One in four of us doesn't realise that missing card payments will harm your credit rating - and it will stay on your records for at least six years. Make a point of setting up Direct Debits to take care of at least your minimum payment each month.

Peter Turner, Managing Director at Experian Consumer Services, UK&I Ireland, said: "With the New Year we could all benefit from doing a credit health check - budgeting for the year ahead, ensuring we are getting the best deals on our regular expenditure such as utilities, insurance etc, and planning ahead to ensure our credit rating is in tip top shape - crucial for anyone planning to apply for credit in 2013."