Snowman and presents
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Christmas is a wonderful time of year.

Families and friends reunite and for an all-too-brief time, and demanding work priorities are put aside in favour of festivities. And in our busy lives that’s exactly what we need.

But now that we’re back in the office, it’s worth bearing in mind that Christmas can also create a tipping point in our finances. All those festive pleasures come with a price tag, which can lead to an unpleasant financial hangover.

There is strong cultural pressure to spend money over Christmas – in fact, one in three of us feel pressured to spend more than we can afford. The demands of food, gifts and holiday transport mean the average household spends £500 more in December than they do in the average month. And the fact that many of us are paid earlier in December, making it quite a stretch to the next payday, doesn’t help.

Some fund Christmas through taking out an overdraft, others by borrowing from family. But, worryingly, large numbers of us are relying on credit cards and punishing payday loans to get us through this expensive time of year.

Facing the music

In the New Year, once the music stops and reality sets in, many of us wake up with a painful financial hangover. We saw in the first few days of 2018, when debt advice charity National Debtline reported that 16% of people surveyed – equivalent to nearly 8 million people in the UK – said they’re likely to fall behind financially in January because of overspending during the Christmas period. And Action for Children recently reported that a quarter of parents in the UK borrow money to cover Christmas expenses, which means more debt following them into the New Year.

And with the news that UK households are spending more than their income for the first time since 1988, the effects of this festive financial hangover will be keenly felt around the country.

The problem is that in the build-up to Christmas, it’s easy to lose sight of the financial consequences of overspending. This is why it’s important that as many people as possible are aware of the resources they can draw on if they slip into difficulty.

Falling behind financially has proven adverse consequences. It impacts on personal relationships and  mental health – in fact, 40% of people with mental health problems have severe or crisis debts. Financial problems have also been shown to affect physical health and social wellbeing, making it harder to enjoy the kinds of social interactions that we all need.

But the impact isn’t just on people, it affects businesses too.

The cost to business

Research by Barclays found that poor financial wellbeing in the workforce can cost organisations 4% of their productivity [PDF]. It also noted that money worries were causing 46% of employees to lose sleep, and causing the work of one in five to suffer. There’s evidence that people are interested in improving their financial wellbeing – a new report from Barnett Waddingham says half of all employees say they’d make use of financial wellbeing benefits if they were offered.

So it’s not surprising that more employers are taking financial wellbeing in the workplace seriously. Some of the financial wellbeing programmes businesses are offering are preventative, like educational seminars and one-to-one advice sessions, while others are reactive, aimed at helping employees get back on track financially. At the Bank Workers Charity (BWC), we welcome this and want to see businesses do more for their employees’ financial wellbeing.

One important way for this to happen is for managers to develop their own awareness of the resources they can direct staff towards. Line managers are usually the first organisational touch point for employees who are struggling with personal problems. In the New Year, some of them might learn that members of their team are dangerously overstretched following an expensive Christmas season and are looking for help in dealing with this financial hangover. The sooner these employees receive help the better, so an early referral to a recommended source of support is the best route to take.

How can you help employees start 2019 on the right foot financially?


  • Many UK businesses have an employee assistance programme (EAP) which provides services including financial information and advice
  • Of UK businesses, 22% are now estimated to have financial wellbeing programmes in place, so it’s important that managers are aware of internal resources and support that may be of help to employees


Read our 2017 whitepaper, Time to do more: Financial wellbeing at work, to find out more about the scale of financial difficulties in the UK population, how these impact on businesses performance, and how and why businesses should play a role in improving financial literacy among their workforce.

A version of this article first appeared in 2016.