Debt solutions company; Scottish Trust Deed has issued a stark warning to consumers to avoid borrowing money to pay for Christmas in light of new figures from the Sky News Hard Times index.
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Compiled by Oxford Economics, the Hard Times index is an indication of consumer spending power and takes into account numerous factors, including inflation, mortgages and credit card interest, wage rises, tax changes, benefits, and government spending on public services. August saw it drop to the lowest figure ever recorded since it began - 94.3 in July to 94.1 in August. Amid the harshest economic environment for 30 years consumers now face the battle of finding money for Christmas while the money in pockets dwindles.
A spokesperson for Scottish Trust Deeds company said: “For many people Christmas will be the hardest they’ve ever had. With the Hard Times Index dropping and the Government intent on making serious cuts in public sector spending soon, the situation can only get worse. The conditions we’re experiencing now are tougher than those of the 1980s recession. This January’s VAT rise plus inflation predicted well above the 2% target means the cost of living will continue to outstrip any growth in people’s salaries and greatly reduce how much they have to spend".
Oxford Economics’ senior economist Andrew Goodwin said: "The index fell for the nineteenth successive month in August, further increasing the squeeze on households. We expect to see the index falling further over the coming months. Household finances have been under strain for some time now and there is no prospect of any let up in the near future.”
Against this backdrop, many people may decide to borrow money, putting their Christmas spending on a credit card or taking out a loan. “Scottish Trust Deed is urging everyone considering borrowing money for Christmas to think twice before doing so,” said the spokesperson. “There are forecasts for more job losses once the spending cuts are made in October so anyone borrowing money for Christmas could run into serious trouble if the worst happens and they lose their job.”
With over two months to go before Christmas Scottish Trust Deed believes there’s enough time to find the money needed without resorting to credit. “First, see if you can make simple savings by cutting back on your spending for the next couple of months. Second, have a good de-clutter of your home and sell off any unused or unwanted items through classified ads or online auction sites. Third, set a budget for each person you intend to buy presents for and take advantage of any special offers, vouchers and sales both on the high street and online.
“Finally, if you can’t see any way you’ll be financially afloat for Christmas and your debts are getting rapidly out of control, take action and talk to someone professional as quickly as possible. The pressure of Christmas can bring many people’s financial problems to a head and Scottish Trust Deed has helped countless people find debt solutions when they’ve been in serious crisis over the festive season. While you might not necessarily have the money to afford a lavish Christmas afterwards, what you will have is peace of mind and no debt collectors chasing you. And sometimes that’s more valuable than anything wrapped up under the tree.” | 
