- We’ll spend an average of £611 on Christmas this year. That’s up from £569 last year and £576 a year earlier.
- One in seven people (14%) will spend more than £1,000.
- Men spend more than women (£644 compared to £580) and higher rate taxpayers spend more than basic rate taxpayers (£916 compared to £566).
- The ‘squeezed middle’ – aged 35-54 – spend more than any other age group (£686), and parents spend much more than those without children living at home (£814 compared to £477).
Figures from a survey of 2,000 people by Opinium for HL in September 2024
Sarah Coles, head of personal finance, Hargreaves Lansdown:
“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.
The Grinch view
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.
Key steps to keep the cost of Christmas under control
- Draw up a budget now. Even if you’ve already started Christmas shopping without one, work out what you’ve spent so far, and how much more you plan to buy. If money is tight, it will dictate the budget. If you have more wiggle room, consider how much you really need to spend on Christmas and how much you can put aside for the future instead.
- Consider what else you need to buy, and assess whether it’s realistic within your budget. That gives you the opportunity to consider whether you can avoid busting the budget by shopping around, or whether you need to make more drastic cuts.
- If you can’t buy for everyone, or cover the cost of all the trimmings, consider where you can cut back. It might mean talking to family and friends, and asking whether you can skip some gifts – or only buy for children. If you get in before everyone has shopped, you can give everyone a chance to save.
- Move some of your celebrations to the New Year. Not only will you have another payday to put towards the cost, but you can also take advantage of post-Christmas sales and re-gifting to cut the price of presents.
- If you absolutely can’t get through the period without borrowing, now is your opportunity to find the most cost-effective way to borrow plenty of time in advance.”
