- Almost a third of people plan to cut back on their Christmas present spending this year
- Most people blamed the cost-of-living crisis for the cutbacks
- Four in 10 people have agreed with family and friends to spend less
- Around one in eight people said they feel pressure from family or friends to buy more expensive gifts
Laura Suter, director of personal finance at AJ Bell, comments:
“The UK is heading for a leaner Christmas this year, as almost a third of people plan to cut back on their Christmas present spending* after a year that has put a real crunch on people’s budgets. While just over half of people plan to spend the same amount as last year, 30% said they will spend less on presents this year and 7% are cutting out any gift buying altogether. Considering prices have risen dramatically this year, even those who plan to spend about the same will likely find that they are giving smaller or fewer gifts, as the same amount buys fewer items this year.
“Of those who are cutting their budgets for presents, the majority said the cost-of-living crisis was to blame. Either they had less disposable income to spend on presents, meaning they had to tighten budgets, or they were worried about the impact that high prices and inflation would have on their money next year. But four in 10 people have got ahead of the problem and agreed with family and friends to spend less – hopefully averting any awkward moments on Christmas Day.
“But there are still people who plan to splash the cash this Christmas – highlighting that the cost-of-living crisis hasn’t dented everyone’s finances. If you’re cash or asset rich and don’t have any debt or mortgage borrowing, then you’ll have been far better insulated against the recent period of rising prices. Additionally, if you’ve seen above inflation pay rises then your income will have been protected from the ravages of inflation. A quarter of people said this was the case – they had more disposable income than last year and so were increasing their gift giving budget.
“Of those who plan to spend more, 44% wanted to treat family and friends more than usual. For a third of those who are spending more it’s just the reality of inflation at play – as buying the same gifts as last year will now cost more. So, while many will be shelling out larger sums, those receiving the gifts may not notice that extra spend.
“For a small but sad proportion of the population, the pressure to give more presents means they will be spending more. Around one in eight people said they feel pressure from family or friends to buy more expensive gifts – meaning they’ve had to budget more for Christmas this year.
“As we get closer to Christmas the most important thing to do to avoid over-spending is not to make panic purchases. It’s better to head to the shops with a rough idea of what you want to buy and how much you want to spend, rather than rushing around and grabbing things last minute. The sales have started in some shops, so before you head to the checkout do a quick Google to see how much you can buy the item for in other shops – that two minutes of searching could save you a lot of money.”
*Based on a nationally representative survey of 2,000 UK adults carried out online by Opinium from 1 to 5 December 2023.
