Waiting for the January Jackpot: First payday of 2018 fails to deliver as average Brit is £250 out of pocket due to festive overspend

27 February 2018

  • Six in ten say their finances are out of shape, according to new poll from Nationwide
  • One in four won’t have their account up straight until May while one in ten say December
  • £119 difference between highest and lowest regions for savings expectations across 2018
  • Seasonal survey forms part of Nationwide’s Q4 Spending Report, dissecting 200m transactions
  • February is set to be a tough month as research reveals the average Brit is already £246.60 out of pocket by the time they are paid in January.

Due to Christmas and January spending, six in ten (60%) people believe their finances are out of shape today, with just 40 per cent describing their balances as ‘normal’.

The seasonal poll from Nationwide Building Society, which surveyed 2,000 UK adults, forms part of the Society’s Spending Report - insight based on more than 200 million consumer payment transactions highlighting where and how Brits are spending.

Nationwide’s data shows customers spent an average of £349.78 per month enjoying themselves in the last quarter of 2017 – with spending on recreation up £60.30 to £109.39 and eating out up by £32.11 to £64.99.

Getting back to normal:

The poll shows that almost half of Brits (48%) have less than £100 spare each month, meaning the impact of diminished January finances could eat well into 2018. One in four (27%) won’t have their current account back to normal until at least May while around one in ten (9%) won’t do so until at least December. A further 11 per cent don’t expect their current account to return to health at all this year.

Those aged between 16 and 24 are most likely to use their January pay packet to pay off the festive shortfall. This is perhaps not surprising given this bracket has average post-Christmas debt of £328.72, compared to £109.08 for those aged 55 and above. Interestingly, it’s those earning £15,000 a year or less who are avoiding dipping into their January wage to cover their losses.

Furthermore, Brits expect to accrue an additional £795 of debt per person in 2018, making it potentially difficult for many to recoup money any time soon.

Cutting back in 2018:

The January shortfall means many have felt the need to cut back on discretionary spending. According to the poll, less than a fifth of respondents (18%) said they expect to spend more this year than 2017 and close to a third (31%) made a resolution to spend less across the year.

When it comes to gender differences, women are more likely to cut back than men (24% vs 19%). This is despite the research showing women went into 2018 with less debt, at £236.54 on average compared to £261.97 for men.

Areas where people expect to make savings include lunches (28% will reduce spend), takeaways (18%) and nights out (21%). One in six (17%) aim to save by switching to cheaper supermarkets.

The research also highlights a range of measures Brits will be taking to budget more effectively. These include:

  • 58 per cent aim to regularly check their account balance
  • 29 per cent will write a ‘budget list’
  • 24 per cent will use banking apps more frequently
  • 15 per cent will draw cash each week to limit spending
  • 4 per cent will give their card to their partner to avoid temptation

Saving expectations:

Longer term, it’s a more positive outlook for the nation, with the average monthly amount expected to be put away being £210. But while more than four in ten (41%) aim to save money within the first six months of 2018, around a quarter of people (24%) claim they won’t be able to start saving until at least April. A further 13 per cent fear they’ll never be able to save.

Regionally, there is a big difference in monthly savings expectations, with a gap of around £119 between the highest and lowest areas (London and Wales).

Regional breakdown of amounts expected to be saved per month in 2018
London £242.82
Northern Ireland £229.30
Yorkshire and the Humber £227.90
South East £218.18
East £213.87
South West £186.68
Scotland £175.14
West Midlands £166.59
East Midlands £157.15
North West £155.66
North East £138.25
Wales £123.76

The research also highlighted that consumer confidence remains broadly positive. Brits are still using January to book summer holidays (14%) or UK breaks (11%) and spending more on healthy foods (15%). Similarly, to save a bit more money, a fifth (19%) say they’ll cook lunches and dinners as opposed to buying them.

John Hutton, Nationwide’s Director of Payments, said: “The January payday marks a low tidemark for many people’s finances but the good news is that for most it should be progressively easier to get your current account in good shape as the year rolls on.

“Our data, based on 200 million digital consumer transactions, is supported by the poll. Spending is naturally up in the last three months of the year due to festivities, while January continues this trend as millions of us take to the sales, join a gym and plan our holidays.

“We should therefore expect major seasonal events to impact our finances. To tackle this, we would always encourage people to plan their spending and to budget where possible. And while it isn’t always possible to save, even putting aside a small amount each month could build some financial resilience.”

About Nationwide

Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

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