Credit, Collections & Insolvency News
New figures from Opinium for Hargreaves Lansdown has predicted that consumers will spend an average of £611 on Christmas this year. An increase from £569 last year and £576 a year earlier.
The research found that one in seven people (14%) will spend more than £1,000.
The data showed that men spend more than women (£644 compared to £580) and higher rate taxpayers spend more than basic rate taxpayers (£916 compared to £566).
Meanwhile the ‘squeezed middle’ – aged 35-54 – well spend more than any other age group (£686), and parents spend much more than those without children living at home (£814 compared to £477).
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown said “We’re set to splurge this Christmas. After two years where the squeeze on our finances drove us to the bargain bins for Christmas presents, the easing of inflation means some people can afford to splash out a bit more this year – and they’re not holding back.
“Those groups who can most afford it are set for a bumper festive period. This includes higher rate taxpayers. One in five of them say they’ll spend over £1,500. Men are also planning to trade up this Christmas, spending an average of £644 – up from £614 a year earlier. On average they earn more than women, so can afford to free up more for the festivities.
“If you’re in this position, nobody wants to be the Grinch suggesting you cut back. However, it’s worth bearing in mind that the good times aren’t going to roll forever. Inflation is expected to bounce back a bit from here, putting budgets under more pressure. And while wages are expected to keep pace with inflation for the next year or so, there are signs of wage stagnation ahead as the impact of higher employers’ National Insurance feeds through.
“As a result, there’s every chance that this could be an unusually flush festive period, so it’s worth considering whether it’s an opportunity to maintain a level head, and keep spending under control. You might want to consider forgoing some of the splurge to put money aside in savings and investments, so you have something to fall back on if times are tougher in the future.
“Some of those who are spending more this year may actually feel forced into a higher spend – even if they can’t afford it. This includes the ‘squeezed middle’ – aged 35-54, who spend much more than average. They’re more likely to have children living at home, and parents tend to spend significantly more too. With so much focus on having a perfect day, there’s a real risk that they’re desperate not to let their children down, and that they could end up falling into debt in order to cover the cost of Christmas.
“There’s also a surprising number of people who have no idea what they’ll spend on Christmas – at 11%. If they haven’t set a budget, or worked out what they can afford to spend, it’s a one-way ticket to overspending.”
