Good news from RCI Bank UK – its latest research shows that many of us are saving more than we were a year ago, which hopefully means more of us are building up a decent financial buffer. The question is, will you be dipping into that buffer to cover the cost of Christmas? Given that it's expected to add up to a whopping £1,500 this year, those extra funds could definitely come in handy!
The research found that 31% of survey respondents are saving more per month than they were last year, with only 15% saving less. Those who are saving more are managing to squirrel away an extra of just over £62 per month, totalling an impressive £750 over the course of the year – and that's just in extra savings! Not only that, but a particularly savvy 11% are saving at least £100 more per month than they were a year ago, so they could be building a significant savings pot.
While some people will have long-term goals in mind for their savings, others will have more short-term aspirations, and with Christmas fast approaching, 30% are planning to dip into their savings pot to cover their festive spend. This could be far preferable to other options, with 13% planning to use a credit card and 5% having to dip into their overdraft, potentially resulting in a financial headache in the New Year.
"We welcome the news that so many families are putting more money away than they were 12 months ago, and that adults are securing their financial future with an extra £750 a year in their savings pots," commented Jean-Louis Labauge, CEO of RCI Bank.
"Saving for the future is important at any stage in a family's progression, [and] with the festive season also fast approaching, it is important families plan ahead to the best of their abilities. Strong saving habits can go a long way to make the holiday period less stressful."
Have you got savings you can dip into during the festive season? Hopefully you've been planning ahead and have built up a festive savings pot for this very reason, because with many people only having a single paycheque left before the big day – and some having already been paid – the full cost of Christmas could be tricky to cover otherwise.
Just make sure you check the withdrawal restrictions on your savings account – ideally you'll have this kind of fund in an easy access account, or perhaps a regular saver that you opened a year ago, because if you'll be facing penalties for withdrawals, it could undo all your hard work.
But what if you haven't been quite as organised as you'd planned? That's where things like 0% purchase credit cards can come in, allowing you to cover your festive shopping without needing to worry about interest adding to the bill for as long as two years (or more). Just make sure you can comfortably afford the repayments, and that you'll be able to pay the balance off in full before the interest-free period comes to an end.
Once you've got this year sorted, it's time to start looking to next year's festive spend – it's never too early to start! If you start planning now you can build up your cash reserves just in time for Christmas 2017, and can put your festive financial buffer to excellent use.
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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