Rising cost of living prompts one in five Britons to turn to loans to fund the cost of celebrations
- Forbes Advisor, the price comparison and financial information platform, has conducted research on how people are spending on life events as the cost of living rises
- Research shows that one in ten Britons (11%) use personal loans and a similar number use payday loans to attend and give gifts for events such as weddings and birthday parties, while more a quarter (26%) rely on credit cards
- A quarter (26%) of Britons said they would have to cut back on gifts or attendance at events due to the rising cost of living, while one in eight (13%) say they can no longer afford to attend the celebrations
- More than half (51%) of Britons admit they would rather not give a gift if it was socially acceptable
Worryingly, 11% resort to expensive payday loans to raise funds, while more than a quarter (26%) rely on credit cards.
More than one in 10 Britons (12%) say they turn to family or friends for money to cover the cost of life events.
The study, conducted by Forbes Advisorfollows months of rising costs of living, as UK inflation hits a 30-year high of 5.5%.
More than a quarter of respondents (26%) say they should cut back on gifts or spend less to attend important life events due to the rising cost of energy, fuel and food . One in eight people (13%) say the rising cost of living means they can no longer afford to buy gifts or attend celebrations.
The study also listed the most expensive celebrations that Britons attend as guests over their lifetime, based on the average cost of attending and giving a gift:
- Family wedding – £235
- Bachelor/Bachelor Party – £199
- Friend’s Wedding – £199
- Diploma – £189
- Baby shower – £165
- Engagement party – £159
- Birthday Party – £156
- Christening ceremony – £154
- Adult Birthday – £142
- Housewarming – £138
When it comes to gifts, three-quarters (74%) of wedding guests would attend and give a gift, compared to 68% of birthday party guests and 55% of christening ceremony attendees.
Two-thirds (69%) of Britons say they would opt for a personal gift to the recipient. However, in reality, the most popular type of gift given is a voucher or cash (33%), followed by food or drink, such as a bottle of champagne (31%).
Similarly, a third (33%) of respondents say they would most like to receive money as a gift.
In addition to the financial cost, research also shows that expectations around weddings, birthday parties, and other life events can affect personal relationships.
Two-fifths of Britons (41%) admit to having argued with a friend or family member over the cost of an event and as a result, more than half (51%) say they would rather not give gifts when attending a special event. occasion if it was socially acceptable.
Laura Howard, personal finance expert at Forbes Advisor, said:
“The end of Covid-related restrictions on international travel, the number of guests at events such as weddings, self-isolation and the wearing of masks, is a huge breath of fresh air as we move forward. towards a brighter spring and summer 2022.
“Yet as we emerge from one crisis, the brunt weighs heavier on another – the soaring cost of living. Ukrainians fleeing their homes because of war But, for those of us on British soil, it’s the kind of worry that can keep us awake at night.
“Inflation as measured by the consumer price index (CPI) hit 5.5% in January – a 30-year high – while February’s figure is almost certain to be even higher. And even that figure won’t reflect the upcoming rise in energy costs that is expected to hit household budgets in April.
“We have no choice but to power our homes, refuel our cars and buy weekly groceries – all costs that have skyrocketed since the pandemic began. But for more and more households, this is simply where the money is running out and “extras” such as celebrations of life become unaffordable.
“So it’s no surprise that a growing number of us are resorting to borrowing to fund these celebrations – in some cases even using payday loans.
“Cutting expenses is not an easy task, especially now that cheap energy deals are no longer available. But it’s worth seeing if there are unnecessary expenses to contend with.
“Are you paying interest on credit card debt, for example, when you could transfer the outstanding amount to a 0% balance transfer agreement? Are you free to change your best mortgage offer or reserve your next (which you can do three to six months in advance) before the next likely interest rate hike?
“You may just be paying for services or features that you don’t use, like your broadband and TV offer, for example.
“Any money spent unnecessarily is always likely to find a home, for example to fund life events and celebrations this year. But if it’s just not available, the key is not to give in under pressure and spending what you don’t have.Being creative and thoughtful when giving gifts can be a remarkably effective substitute that will often be remembered for longer.
Methodology: The study of 2,000 UK adults was commissioned by Forbes Advisor via OnePoll.