One-third of UK adults will run out of money by the end of January due to higher winter bills and financial strain from Christmas expenses, a survey says.
Personal finance company Credit Karma found that 56 per cent of those who will run out of money during the month will have spent their entire monthly income by January 20.
The survey interviewed 2,000 UK adults between January 6-9.
As dire financial positions start to set in, people will start to turn to alternative sources of funds, such as credit.
Credit Karma says January 19 tends to be the most likely date for those in financial hardship to apply for credit.
Akansha Nath, general manager at Credit Karma, said: “The high cost of Christmas often leaves a sting in the tail of January budgets, as many people have to wait longer to get paid, as well as cope with expensive winter energy bills.
“That’s why now is the time to consider a budget planning tool, to help plan outgoings.
“If you have taken out credit over Christmas, consider the best ways of paying that off whether it’s consolidating your debt or looking for an advantageous balance transfer offer.”
One in five (21 per cent) of those surveyed said they had applied for credit to help with funds over Christmas.
Nearly a third (31 per cent) either already used or plan to apply for credit in January to help manage their Christmas expenses.
The most commonly used credit options were credit cards (22 per cent), buy-now-pay-later schemes (6 per cent), car finance (4 per cent), and personal loans (4 per cent).
According to the survey, 29 per cent of people plan to acquire credit in January to cover essential bills and necessities.
To help manage their finances, some are planning to budget their non-essential expenses over the next 12 months. The survey found that 26 per cent of people plan to avoid socialising, while 47 per cent will refrain from purchasing new technology.
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