Christmas spend to make 10,000 bankrupt
Wednesday, 03 January 2007 12:00
Overspending at Christmas is set to land 10,000 Brits so far in debt that they will have to declare themselves bankrupt, research out today reveals.
Accountancy firm Grant Thornton expects 30,000 personal insolvencies in the first quarter of 2007, a third of which will be caused by a Christmas-time financial hangover.
The forecast is based on figures showing the number of Britons experiencing mortgage repayment problems is up for the fourth year running, hitting 7.7 per cent in December 2006, with rising household bills and unemployment adding to mounting debts.
At the same time, Grant Thornton notes retail spending has been going up, with more money being spent on shopping last year than the year before.
"The simple conclusion is that as money available becomes tighter but spending increases, it is inevitable that more people will help flare up the statistics in the new year," said Mike Gerrard, head of Grant Thornton's personal insolvency practice.
He added: "A little overspend will not break the bank for most, but for those who are already financially overstretched, spending that little bit more during the festivities can represent the straw that breaks the camel's back, plunging individuals in already precarious financial positions further into debt and quite possibly towards bankruptcy," Mr Garrard warned.
Citizens Advice also said they expect the number of people with serious debt problems to rise.
"We do see evidence of a Christmas debt hangover, and this month we expect to exceed the 140,000 debt problems that Citizens Advice bureaux dealt with in January 2006," commented Sarah Miller of Citizens Advice.
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