Debt warning: 'Don't live a champagne life on a lemonade budget'

Andy is on a repayment plan and is urging others to seek help

Andy Barwell's debt difficulties began when he was a rugby-playing teenager. Paying off creditors will go on long after his playing days are over.

Now he sees lots of young men taking the same financial risks, some of whom are inspired by images of wealth and the high life as they scroll through social media.

"You can't live a champagne life on a lemonade budget," he said. "You need to have the money in the bank."

The temptation to overindulge and be left with a financial hangover is clear during the festive season. With the cost of living rising, the extra expense of even a basic celebration is pushing others to the financial brink.

A YouGov survey for the BBC suggested that about half of those aged up to 45 admitted they were likely to spend more than they should this Christmas. While some will cut back on other spending to pay for Christmas, others will borrow more.

• More than 17 million have used buy now, pay later

• Covid debt cycle linked to mental health issues

Andy, now a 30-year-old father of two, said he loved Christmas, but remembered it as a highly stressful time when he was trying to please friends, family and a new partner, even though he had no money.

One Christmas Eve, his money worries were so intense that he rang the Samaritans. His debt peaked at £35,000.

"Eventually I realised I would never get my head above water. On the first of the month I was paid, on the second I was paying off cards and by the middle on the month I had nothing. It was a vicious cycle," he said.

Where to go for help

Fraudsters are pretending to be debt and financial advisers online and on social media. Genuine, free advice is available from:

• StepChange - via their website, and during opening hours by phone on 0800 138 1111

• Use the Debt Advice Locator tool on the government-backed MoneyHelper service website to find free advice near you

He was referred to the StepChange debt charity by his bank, put on a repayment plan, and is able to save throughout the year for Christmas.

"I've not looked back since. Anyone in the same situation should speak to someone now. Don't wait. Don't be embarrassed about it," he said.

The concern is that during a Christmas with fewer Covid restrictions, but rising bills and prices, more people are financially vulnerable.

Research taken from 9.5 million customers of the large credit management and debt collection company Lowell shows that credit use is starting to rise again after the height of the pandemic.

Covid support schemes, such as payment holidays, helped to keep a lid on some debt issues, but many of those allowances have now been withdrawn. The company's UK Financial Vulnerability Index suggests there are now greater risks of people missing repayments or being left without savings for emergency expenditure.

"We are concerned about our nation's financial health. With Covid support falling away, we can already see vulnerability ticking up. This has been rising since 2017 and we need to have an honest conversation about why," said Lowell's chief executive, John Pears.

Other survey findings include:

• Of those who do expect to borrow to pay for Christmas, a quarter (24%) said it would take a year or more to pay back the money, a survey for StepChange suggested

• Some 27% of those asked in a YouGov survey for the BBC said that "the cost of Christmas makes it all too stressful"

• Citizens Advice said that one in 10 families were facing a financial crisis this winter because they were unable to meet their essential costs

Research from England's Illegal Money Lending Team found that Christmas was the second most likely reason for people borrowing money from loan sharks, after paying for essentials such as food, rent or mortgage, and utility bills.

Sue Anderson, from StepChange, said that families determined to enjoy Christmas despite bills rising could make things difficult when the credit demands arrived in the new year.

"The cost of the festive season can be the straw that breaks the camel's back for people already struggling," she said.

"This year, our research suggests that a significantly increased number of people may turn to credit to make ends meet over Christmas. People are also widely worrying about the increasing general cost of living and specific price hikes in the cost of essentials such as energy."

As some people face those financial difficulties, fears have been raised about reductions in the availability of free. face-to-face debt advice.

New contracts from the Money and Pensions Service, which funds most free debt advice in England, will see more money spent on help given over the phone or online.