Two-fifths of consumers plan to spend less this Christmas

Two-fifths of people plan to spend less this Christmas according to research by AJ Bell.

The research found that theEast Midlands is the spendiest region.

Whilst the average spend on presents is £100-£250, with 28% of people saying that’s their budget, while 26% plan to spend between £250 and £500. Just 5% of people say they’ll spend more than £1,000.

However, 13% of people have no budget or ballpark for how much they’ll spend on presents.

The research found that a quarter of those spending less have agreed it with family and friends

Laura Suter, Head of Personal Finance at AJ Bell, said “Rising prices and a crunch on many people’s income over the past year mean the UK is headed for a leaner Christmas than usual. Two-fifths of people plan to spend less on presents this Christmas than they did last year, with most saying their finances have been hit so they need to tighten the purse strings. Spending less coupled with rising prices causing the cost of each gift to go up, means that many people will have significantly fewer presents under their tree this year.”

“It’s clear the effects of the pandemic are still being felt in many households, with cuts to income coupled with rising prices and bills meaning lots of people are feeling worse off than last year. Of those planning to spend less this Christmas, half said it’s because they’ve seen their finances hit in the past year. Another 11% said they are already in debt and so don’t want to overspend on Christmas.”

“But it seems like some of the taboo of talking about money is being eroded, as a quarter of people said they had agreed with family and friends to spend less. Often people feel pressure to spend more than they have at Christmas, to keep up with their close ones, so it’s encouraging more people feel able to openly discuss the need to spend less.”

“Just 8% of people plan to spend more this year than last, with some making up for last year’s cancelled Christmas and subdued celebrations. Of those who plan to up their spending, two-fifths said it’s simply because they have more money than last year. Many people have been able to save money in the pandemic, while some will have seen their job situation improve on last year. More than a fifth of people planning to spend more said they are making up for last Christmas, while another fifth are being forced into spending more because things are more expensive. Those in the East Midlands were most likely to spend more, followed by the south-west and London.”

How much are you planning to spend on all your Christmas gifts this year?
Less than £100	15%
£100-£250	28%
£251-£500	26%
£501-£1,000	13%
More than £1,000	5%
I haven’t budgeted for it	13%