January can be an expensive time for many, as people across the country recover from Christmas expenses and other costs accumulated throughout the year.
However, it’s also a key month for many people to review their finances and prepare for the year ahead.
New research from personal finance experts at Confused.com reveals that over half (55%) of Brits are in debt in the New Year following Christmas expenses.
This is as the average Brit spent £635 on Christmas last year.
Given the large expense, many claim that it’s going to set them back financially for a long period of time. Nearly 3 in 10 (29%) think it will take them over a month to financially recover from Christmas 2025.
On average, Brits take a month to settle their Christmas costs and reset financially for the New Year, with nearly a quarter (22%) taking 3 to 4 weeks to pay off festive debts.
With median weekly earnings for full-time employees sitting at £766.60 as of April 2025 , it’s unsurprising that Brits are tightening their belts entering the New Year to preserve what they can of their salary.
Despite this, nearly 1 in 2 (45%) Brits feel financially ready for the year ahead. With a third (33%) reviewing their finances in January, more Brits are taking the opportunity to seize control of their outgoings and financially reset for the year ahead.
To overcome financial pressures in 2026, almost a third (32%) of Brits pay off their Christmas debts by dipping into their savings.
Meanwhile, over half (56%) use their salary to cover Christmas costs, followed by 32% using their savings. This shows Brits are financially aware and more savvy with spending amid the ongoing cost-of-living crisis.
The festive period is the most expensive time of year for many, with additional expenses like gifts, more food, and decorations increasing monthly spending. That’s why more than two fifths (43%) save regularly throughout the year to pay for Christmas, helping to avoid a sudden surge in spending towards the end of the year.
To start the new year financially secure, many Brits look to clear debts from the previous year. That’s as nearly 1 in 6 (16%) regularly do a balance transfer on their credit card to avoid paying interest when managing Christmas costs.
Over 1 in 10 (11%) transfer debts to a zero-balance credit card. This reduces pressure for people to pay off their debts straight away and instead allows people more flexibility to repay them at a pace that suits their financial situation, without incurring additional interest.
For 6% each, taking on another job, borrowing money from friends or family, or taking out a loan is how they clear their balance. The measures people will go to in order to clear their debts show a strong commitment to ensuring their finances are organised for the year ahead.
With a new year starting and inflation remaining persistent, many people are becoming more conscious of how and what they spend their money on.
Nicola Morgan, personal finance expert at Confused.com, shares tips for Brits looking to save money over the year ahead, “The New Year is an opportunity that many people take to look for ways to make improvements for the year ahead.
“With money being a priority for many across the country, now is a good time to preserve finances for the upcoming year. There are small steps you can take that make a big difference to your future financial situation. These include:
- Setting a clear spending plan: Keeping track of your monthly outgoings will help you prioritise, monitor your spending habits and cut back where necessary.
- Saving each month: Putting away a small amount each month can result in bigger savings throughout the year. Different people will have different salaries, but if you are able to put even a small amount of your salary into savings each month, it could go a long way.
- Taking part in saving challenges: Budgeting challenges are popular across social media channels and are an effective way for people to save money each month. Taking part in challenges like ‘1p a Day’, ‘No Spend Days’, and ‘52-Week Challenge’ will not only help you to save money, but are a more interactive and fun way to preserve finances.
“It’s important to find a method of saving that works for you and aligns with your lifestyle. But keeping an eye on your spending and saving where you can will help ease strain and worry throughout the year ahead. “
