UK Consumers Avoid Christmas Debt

16/07/2007

A growing number of consumers are financing their Christmas party expenses and Christmas presents through savings, rather than debt.

Despite the well-publicised collapse of Farepak last year, Christmas savings clubs are becoming an increasingly popular way for people to finance their spending during the Christmas party season.

Peter Johnson, the owner of Park Group, said in an interview with the Daily Post: “People are getting fed up of taking on credit card debt over Christmas. It’s a very expensive time of year. People now realise that saving before Christmas is a better way of doing it and it has been growing year on year.”

However, the Farepak collapse has had a negative impact, at least in the short term, for Park Group. The company, which offers a range of traditional Christmas hampers and vouchers that can be spent in 19,000 high street stores, has seen a 36% decline in customers signing up to save for next year’s Christmas party season. Farepak’s collapse with debts of £40m marred what was otherwise a strong year for Park Group.
Mr Johnson said he was certain confidence in the industry would be restored by recent improvements in regulation: “When [Farepak] went into administration people became aware there was going to be no Christmas for 150,000 families. We are confident that, once confidence is restored to people, they will come back.”

He added: “We have dealt with it by working with the Government agency to put money in trust accounts with independent trustees and a monitoring body called the Christmas Prepayment Association with independent directors.”