It has been reported that the British could be putting more financial pressure on themselves in an attempt to keep up with the Joneses.

In research by CreditExpert, roughly one in five people (19 percent) admit to overspending due to peer pressure. And by trying to show off to family and friends by buying luxury items such as designer clothes and flashy cars, they spend a total of £45bn just to keep up with the lifestyles of those around them. Meanwhile, the average consumer was reported to spend £5,874 above their means each year.

The results also revealed that 37 per cent of Brits overspend for fear of not fitting in with those around them, with 48 per cent of those surveyed feeling pressured to spend more money on gifts for their loved ones than they would originally intended. Additionally, the study indicated that men are spending more than £1,964 per year on their cars, while women are spending an additional £1,068. It was also shown that just over a third (38 per cent) were spending more than they would have liked on gifts for co-workers.

However, managing director Jim Hodgkins said such a lack of control over their finances could cause consumers to damage their credit scores and cut off their access to competitive loans in the future. Consequently, this in turn can lead them to obtain a loan with bad credit.

He said: “It’s amazing to see how much we overspend just to keep up with our peers. While it’s great to be generous at the bar or on a date, we should spend because we want to and not because we feel pressured.” Spending beyond your means due to peer pressure can lead to mounting debt that could lead to a poor credit rating, and unfortunately, if your credit rating isn’t attractive to lenders, they’ll be less willing to offer you credit, which means I could lose on the new car or apartment you’ve fallen in love with.

The research, which surveyed some 1,450 Britons, showed that young people are the most likely to give in to buying pressure from their peers. An estimated 41 percent of 18-24 year olds say they spend money to maintain a certain lifestyle, compared to the national average of 19 percent. Just under two-thirds (59 percent) of consumers in this age group say that the desire not to ‘miss out’ was the reason for spending beyond their means.

Meanwhile, people living in London may be facing the most pressure on their daily finances, with a quarter of those living in the capital saying they have spent more money than they intended due to social pressures. On the other hand, it was reported that around 14 per cent of consumers in Scotland and the North East of England spent money when they didn’t want to.

However, James Jones, manager of consumer affairs at Experian, recently suggested that those applying for a personal loan with bad credit in an attempt to reorganize their spending should get a copy of their financial history. By doing so, he said consumers can check their file for discrepancies and identify where a change in their circumstances has previously affected their ability to repay debt, potentially helping determine what interest rate loan providers decide to set.