The Christmas period puts pressure on household budgets. That’s not exactly news. But this year, the squeeze is tight. Recent research shows that nearly one in three households are now struggling or in serious financial difficulty, with millions already cutting back on essentials.

For collections teams, this creates a real challenge. You need to recover debt while treating customers fairly, but traditional affordability models can’t keep up with fluctuating incomes or seasonal strain. Open Banking data can. It shows you when budgets tighten, when payments start to slip, and when a quick adjustment could prevent long-term harm.

In this blog, we look at how Open Banking data enables fairer, more responsive collections over Christmas, with expert insight from Togglit on how debt servicing teams can support customers through a difficult period and help them regain financial stability in the new year. Developed by Qualco UK, Togglit is an FCA-regulated financial wellness platform. 

The state of financial vulnerability 2025According to the latest Office of National Statistics report:86% of adults said the cost of living is one of the most important issues facing the UK. 24% said they found it very or fairly difficult to get by financially, rising to 32% among adults aged 30–49. 26% would be unable to pay an unexpected £850 expense. 37% do not expect to save any money in the next 12 months. 34% of bill-payers said they find energy bills difficult to pay. Among financially vulnerable adults: 71% are spending less on food and essentials. 54% are using less fuel at home. 75% are cutting back on non-essentials.

Why affordability changes at Christmas and what it means for collections

December disrupts affordability and how people manage money. Income becomes less predictable when overtime hours vary, bonuses arrive late, or shifts get cut. At the same time, households face higher utility bills, increased credit use, and spending commitments that were made weeks earlier.

Togglit’s experts explain that Christmas can be “a particularly difficult time for many people,” especially for parents who feel pressure to create the “perfect” experience. This often leads to overspending and increased strain on already stretched family finances. They also note that the festive season is associated with a spike in domestic violence, which is “linked directly to problem debt issues,” widening the pool of customers who may require additional support or a sensitive approach.

Most households enter December with limited savings or financial headroom. That means there’s little buffer when costs spike or income dips. Traditional affordability assessments can’t capture this volatility. Credit bureau data arrives weeks late, and scheduled reviews miss the weekly shifts that matter most.

Open Banking data shows these changes as they happen. You can see when disposable income drops, when essential bills go unpaid, and when a small adjustment could prevent a larger problem.

For collections teams, that visibility changes how you approach the holiday season. You can intervene earlier, adjust repayment plans before arrears escalate, and build trust with customers who need flexibility. It prevents avoidable defaults and helps maintain repayment performance into the new year.

Modern collections strategies: Using Open Banking data from detection to resolution

Effective collections start before payments are missed. The earlier you spot financial pressure, the better your chances of preventing arrears and keeping customers engaged. Togglit notes that over the past few years, there has been a “significant move towards self-service tools and digital engagement practices,” with a wider demographic now interacting with digital debt support platforms. This makes early visibility even more important.

Open Banking data gives you that early visibility. It shows changes in income, spending patterns, and account activity as they happen, not weeks later. Togglit use Open Banking, with customer consent, to help individuals gain greater insight into their spending habits and how these impact their affordability. Their system can flag instances of overspending and proactively notify customers, helping them stay on track.

So, what does this look like? Here are some examples:

1. Detection: spot vulnerability and stress early

The most effective collections processes begin with early insight. Transaction data highlights warning signs long before arrears appear: reduced income, increased credit reliance, or rising essential spending.

Togglit emphasise that it is essential to “thoroughly understand and trust your data” before adjusting strategies. When combined with behavioural indicators—such as whether customers typically engage in the morning or evening—this provides a foundation for early, tailored support.

2. Decision: align contact to real affordability

Once potential stress is identified, the focus turns to calibration. Instead of applying one-size-fits-all repayment options, firms can use live affordability data to match interventions to current circumstances. This may mean pausing a payment, adjusting frequency, or offering more manageable instalment plans.

Togglit highlights that leveraging Open Banking insights alongside timely communications, such as pre-payment notifications, can help customers maintain their commitments and prevent arrears.

3. Engagement: provide human support

Togglit’s experts note that the timing and tone of outreach are as important as the content. Their data collaborations enable insights such as optimal email delivery times and customer preferences for communication channels. This allows teams to design engagement that is relevant and well-timed.

Although Togglit is primarily a digital service, “customers will always have the choice to speak with human agents,” and support staff receive training designed to “build empathy and ensure all customers are treated appropriately.”

4. Resolution: sustain fairness and learn from outcomes

Continuous data monitoring doesn’t end once a repayment plan is in place. By tracking income recovery and spending trends, firms can see when a customer’s position improves and reintroduce standard repayment schedules with confidence.

Togglit explain that firms increasingly measure success by gathering customer feedback, checking that repayments remain manageable, and evaluating progress “against the set plan.” These insights refine policy, improve segmentation, and strengthen compliance with Consumer Duty.

💡 This model takes collections from being a sequence of transactions to a cycle of understanding and support. It protects both customer wellbeing and business performance, and it builds a foundation for truly fair treatment throughout the year and not only at Christmas.

Support financial wellbeing and vulnerable customers during the festive season

The most advanced teams view collections as an extension of financial wellbeing, rather than a separate function. Instead of focusing on recovery after a default, they use data to stabilise customers before harm occurs. Open Banking insights play a pivotal role in that by allowing firms to quantify affordability with the same precision they apply to credit risk.

At an operational level, this changes the most important metrics. Rather than tracking only arrears and repayment rates, leading firms measure:

• Cost-to-collect efficiency, through earlier and more accurate segmentation.
• Outcome quality, by aligning affordability interventions to measurable improvements in customer stability.
• Regulatory resilience, via data that evidences Consumer Duty outcomes across vulnerable cohorts.

By using Open Banking data to target support at the right moment—and by ensuring customers understand how their data is used and that consent can be withdrawn at any time—firms prevent short-term distress from compounding into long-term detriment. The result is more sustainable outcomes, higher trust, and a measurable demonstration of Consumer Duty at a time when fairness is under sharper scrutiny than ever.

Strengthen your collections strategy for 2026

Of course, the aftermath of Christmas is often when financial strain becomes most visible. For many households, January means reduced income, higher credit utilisation, and the lingering impact of festive borrowing. It’s also when traditional collections models tend to falter, reacting to arrears rather than preventing them.

As we’ve touched on, Open Banking data offers a way to change that cycle. Open Banking data offers a way to change that cycle. By monitoring affordability continuously, firms can identify when customers begin to recover and recalibrate repayment plans accordingly. 

Togglit flagged that many customers move toward more long-term arrangements in January, making this a critical period for well-timed, data-led engagement. Firms that maintain proactive oversight through Q1 often see improved payment stability, lower cost-to-collect, and a measurable uplift in customer satisfaction.

These insights extend far beyond collections. By feeding live affordability trends into credit policy, vulnerability frameworks, and treatment strategies, firms enter 2026 with a clearer data advantage:

• Predictive capability, using behavioural and financial data to understand who may struggle, recover or respond best to specific interventions.
  
• Operational resilience, with less reliance on manual reviews and legacy assessment models.
  
• Regulatory confidence, supported by data that evidences Consumer Duty outcomes across different customer groups.

Togglit highlights that the industry is increasingly focused on “analysing results, testing outcomes, and monitoring outputs” to enhance processes and interactions. A key driver of this progress will be the use of “data-driven decision models,” which can continually improve the customer journey, especially for individuals facing financial difficulties.

Building fairer, stronger collections for 2026

The pressure points of the festive period will always test affordability models, but they also reveal how well a firm understands its customers. With the right data and design, collections can be a proving ground for fairness, foresight, and financial resilience. The firms that recognise this will solve challenges and set a new benchmark for customer care in 2026.

Learn more about how AperiData helps firms use Open Banking data to build fairer, more effective collections strategies.

Source: https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/bulletins/publicopinionsandsocialtrendsgreatbritain/june2025/pdf