Your Money: So here it is - in hock at Christmas

"Everyone needs to think carefully about the amount of debt they can afford," said Mervyn King, Governor of the Bank of England, last week. This may seem a pointless comment given that the most expensive time of year is less than six weeks away, but then that's the whole reason for making it: Mr King's intention is to put a stop to the spending before it even starts.

While these are wise words, though, one wonders how much of an impact they will have. Mr King is concerned that the increase in interest rates is just the beginning, which could leave borrowers dangerously overstretched. Spending more than they can afford in the short term will only aggravate this.

But many people will tell you that while this is all very well, it's Christmas. And these aren't just the ones who are most likely to spend beyond their means at this time of year - the 18-24 age group and those on low incomes - since they may not even know who the Governor of the Bank of England is, let alone read his comments. Many other people also tend to make an exception for the festive period. Interest rates have risen recently but not enough, I suspect, to encourage significant belt-tightening in the short term.

And even if common sense dictates that borrowing needs to be reined in, you can bet your bottom dollar this will happen after Christmas and not before.

That a number of people actually take out a personal loan to pay for Christmas presents, food and drink shows what a problem this is. Can the pressure really be so great that those who clearly can't afford it run up extra credit that they may well be paying off come next Christmas? Admittedly, taking out a low-interest loan is more sensible than running up debts on credit cards, but whatever happened to living within your means?

According to research from Abbey, 64 per cent of us pay for Christmas using our savings, while 22 per cent turn to plastic.

And a survey from the insurer Royal London reveals that more than half of us feel pressured to spend more than we should at Christmas, with a quarter of us going over budget. It's easily done but the effects can be devastating.

Christmas can be a great time of year for all the family but it isn't a new boiler, a suit for an interview or the MOT on the car. In other words, it isn't vital, really necessary or life-threatening.

And if interest rates continue to rise in the new year, as predicted, that seemingly harmless overspending in December could come back to haunt many people in the UK for months to come.

m.bien@independent.co.uk