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Have a very happy Christmas…but avoid that financial hangover

Christmas is a wonderful time of year. Families and friends reunite and for an all-too-brief time, demanding work priorities are put aside, allowing us to enjoy the festivities. And in our busy lives that’s exactly what we need.

But before we enjoy those carefree times it’s worth bearing in mind that Christmas can also create a tipping point in our finances, because those festive pleasures come with a price tag. There is very strong cultural pressure to spend money over Christmas and, each year, one in three of us spend more than we can afford. The fact that many of us are paid early 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 (20% according to the Money Advice Service) are doing so by putting it on credit cards. And 2% of us take out punishing payday loans.

Facing up to 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 this last January when, following their Christmas outlay, nearly 60,000 people contacted StepChange Debt Charity for advice. 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.

The adverse consequences for people when they fall into financial difficulty are proven. There’s an impact on personal relationships and on mental health (42% of people who seek help with debt are on medication to help with the psychological effects). It has also been shown to affect people’s physical health and their social wellbeing, limiting their ability to enjoy the kinds of social interactions that we all need. But the impact isn’t just on people, it affects businesses too.

Barclay’s research found that poor financial wellbeing in the workforce can cost organisations 4% of their productivity. It also found that 46% of employees were losing sleep because of money worries and that the work performance of one in five suffered. So it’s not surprising that more employers are putting programmes in place to support the financial wellbeing of their staff. Some of these are preventative, in the form of educational seminars and one-to-one advice sessions. Others are reactive, aimed at helping employees get back on track when their finances get out of kilter. At the Bank Workers Charity (BWC) we welcome this and want to see businesses do more.

One important way for this to happen is for managers to develop an 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 it may well be that some of them will learn that members of their team are dangerously overstretched following an expensive Christmas season. The sooner they 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 overcome a financial hangover?


  • Many UK businesses have an employee assistance programme (EAP) which provides services including financial information and advice.
  • Of UK businesses, 32% are now estimated to have financial wellbeing programmes in place, so it’s important that managers are aware of anything else internally that may be of help to employees.


Watch out for:

In January 2017, BWC will publish a whitepaper, Time to do more: Financial wellbeing at work. This focuses on 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.