Christmas is over, let the spending begin!
I recently shared my New Year’s Resolutions with you, (HERE). I’ll admit, I’m beginning to realise my 12 point list of resolutions was a tad ambitious! A week in, and I’m already wishing I’d set myself two goals for 2017 instead of twelve. What can I say? I got a bit carried away! In fact, it’s safe to say my list of resolutions is rapidly turning into a wish list! I’m still determined to ‘live more frugally’, though. However, according to credit score & report site ClearScore, despite a tumultuous 2016, 82% of us are planning to buy ‘big ticket’ items this year.
Living more frugally.
I’m looking forward to finding ways to save money and live more frugally. In my first money-saving assignment of 2017, I delayed my first ‘big grocery shop’ by using up Christmas leftovers and the food I had in my fridge, freezer and cupboards. Mind you, by the end of my ‘what have I got in my cupboards’ challenge, I was beginning to feel like a participant in an extreme version of ‘Ready Steady Cook!’ I’m convinced Ainsley Harriott would have struggled to whip up a decent meal using half a dozen sprouts and a jar of Marmite!
Brits plan to spend big in 2017.
With me hatching plans to save lots of pennies, it’s little wonder the news that more than 80% of UK consumers are planning to buy ‘big ticket’ items this year surprised me. You’d think after months of Christmas spending, topped off with the January sales frenzy, Brits would be done with splashing their cash. However, the research suggests otherwise, with holidays abroad topping the wish list for nearly 45% of UK adults. Close behind at 38% are the “Staycationers”. It seems consumers can’t get enough of hi-end tech either, with 20% of shoppers intent on purchasing Digital SLRs or MacBooks this year1.
5 most popular big ticket purchases for 2017.
- A holiday abroad.
- A holiday in the UK.
- Consumer electronics, such as a laptop, TV or digital camera.
- White goods.
- New large furniture, such as a sofa.
Funding ‘big ticket’ purchases.
Although 69% of Brits surveyed would prefer to save up to afford big purchases, such as jet-setting holidays, nearly a third (30%) will use credit to fund the bill. With the average British family holiday costing almost £5000, according to a report by Evolution Money, this is hardly surprising. What’s more, 47% of those surveyed said they will use credit to fund at least one of their big ticket purchases in 2017; the most common reason being to spread the cost over a number of months.
ClearScore found that credit cards and personal loans are the most popular forms of credit used to pay for big ticket purchases, accounting for 51% and 28% of purchases, respectively. While holidays topped the list of popular big purchases, people were most likely to reach for their credit card if they were planning a home extension (56%) or buying a car (52%) in 2017.
Alarmingly, research showed that despite having much higher interest rates than other forms of credit, as many as five and a half million Brits (10%) resorted to ‘pay day’ loans and the rent-to-own sector, to cover the cost of big-ticket purchases.
Build your credit score to get the best deal.
If you’re planning on making a big purchase on your credit card this year, improving your credit score could save you a significant amount of money. A top credit score could save an average Brit £20,4522 over a lifetime, on interest repayments for credit card debt alone.
Justin Basini, founder and CEO of ClearScore, said, “When it comes to making expensive purchases; both luxuries and those things we just can’t do without, many of us turn to credit to help with the cost. That’s why it’s vital to manage and build your credit score so that you can get the best deal on your borrowing. Big ticket items cost enough, without saddling yourself with needlessly expensive interest repayments on top.”
Thinking about getting a personal loan? Check out ClearScore’s guide.
In my role as a Voluntary Debt Adviser at Cornerstone Money Advice, Nottingham, I recognise how important it is for people to make the right choices when it comes to personal finance. All too often I see clients who’ve been given the wrong advice or taken out loans or credit cards that aren’t right for them. The consequences can be devastating.
If you’re planning on taking out a personal loan, ClearScore’s have written a guide to personal loans. As well as giving a clear explanation of the financial terms associated with personal loans, the guide also tells you everything you need to know about loans and how to get the best rate for you. Check out ClearScore’s guide now: ClearScore
Over to you.
Are you planning on buying any ‘big ticket’ items this year? If so, what’s on your wish list? Did you know you could get access to better credit card and loan deals if you improved your credit score? As always, I’d love to hear from you.
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1Research conducted with 2,000 UK consumers by 3Gem between 08.12.16 and 14.12.16
2 A typical credit card APR rate offered to someone with a low credit score is 36.5% compared to 20% for someone with an excellent score (based on DeFaqto data). The average UK household credit card balance is £2,452 (The Money Charity, July 2016). The lifetime cost assumes paying the minimum repayment per month and adults using a credit card for fifty years.
