Savers look forward to a simple Christmas as festivities get frugal - Savings - News - Moneyfacts


Savers look forward to a simple Christmas as festivities get frugal

Savers look forward to a simple Christmas as festivities get frugal

Category: Savings

Updated: 31/10/2008
First Published: 31/10/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
  • Eight in 10 Britons cut back on Christmas spending, with Christmas expenditure expected to fall £102 per person from last year;
  • One in four Britons has saved money to cover the cost of Christmas;
  • Number of Britons paying for Christmas on credit to drop 74 per cent in two years.

This Christmas is set to be a far simpler affair for British families, as they rein in their spending. New research from Birmingham Midshires, a leading direct savings provider in the UK, reveals that 78 per cent of Britons are taking sensible steps to make Christmas more affordable this year.

2008 Christmas budgets have fallen by £102, with Britons expecting to pay out £604 on festivities this year, compared with £706 this time last year*. But that doesn't mean that Christmas will be all doom and gloom. The research points to a revival of money-saving Christmas traditions and Christmas dinner at home. There is also positive news on budgeting for Christmas, with one in four Britons having enough money already saved up to cover 87 per cent the cost of Christmas (£527).

Interested in understanding how current financial climate is likely to impact Britons saving and spending habits this Christmas, Birmingham Midshires polled a GB representative sample of over 2,000 adults about their plans for this Christmas.

Saving more and spending less on credit:

  • The number of people paying for Christmas on credit has dropped considerably in the last two years. Just 11 per cent of Britons say that they will turn to their credit card to pay for Christmas this year - pointing to a 74 per cent drop in the number of people putting Christmas on credit from 2006, when 41 per cent of Britons used their credit card to pay for Christmas**.
  • More than one in three people (36%) who cannot afford to cover the costs of Christmas from their salary alone have savings set aside especially to pay for Christmas. Far fewer will raid from long-term savings or investments (11%).

Enjoying a simple Christmas

With 78 per cent of Britons taking steps to make Christmas more affordable, the most common ways of cutting back on costs are:

  1. Spending less on gifts (53%);
  2. Spreading the costs of Christmas by purchasing presents and other festive supplies in advance of December (46%);
  3. Reusing last year's Christmas tree (34%);
  4. Staying at home for Christmas dinner rather than eating out (31%); and
  5. Making Christmas dinner from scratch (25%).

The sad news for some children is that 14 per cent of people of parenting age (35 to 44) will be giving their children smaller stockings this year.

However, there is Christmas cheer in the resurrection of traditions such as picking holly, ivy and mistletoe to decorate the house in one in ten households (9%). Families in the West Country will also be turning their hand to making decorations, such as paper chains and salt dough baubles (7%).

People age 25 to 34 are the most frugal when it comes to gifts, one in ten (11%) giving last year's unwanted gifts to loved ones this year. They are also the most likely to be making their Christmas gifts (8%).

The tradition of roasting chestnuts round the fire this Christmas seems to have been consigned to the history books though, with just one per cent of Britons saying that they will partake in this tradition.

Tim Hague, Director of Savings and Investments at Birmingham Midshires, said: "The financial climate certainly doesn't mean that Christmas is cancelled! As our research shows, Britons up and down the country will be cutting back on spending this year without sacrificing on many Christmas treats. This could have a very positive effect on New Year finances. Planning for the future and saving early for Christmas means that people will be less likely to suffer a financial hangover come January and could leave many a lot better prepared for 2009."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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