20th October 2015
Brits are expecting to spend more than £18bn on Christmas this year, with shoppers forecasting the festive season will cost them an average of £397 each.
The study by MoneySuperMarket found that consumers are planning to spend more than last year’s total of £383 per person.
The highest spending age group are 35-54 year-olds who expect to spend £451 each, while those aged 55 and over plan to pay out £406. The total amount spent on Christmas falls to £323 for 18 to 34 year olds. Those in the North East plan to spend as much as £548 this festive season, whereas those living on the other side of the country in the South West intend to spend £324 each.
However, this increased generosity does come at a price, with 30% of those celebrating Christmas stating they will have to borrow money to cover the cost.
Almost a quarter (23%) will use a credit card to pay for presents, food and other festive costs, and 8% will dip into their overdraft.
Meanwhile, 4% will need to borrow money from their family or friends, and 3% will require a loan.
A third (33%) will rely on their savings, while 29% will use money they’ve been putting aside especially to pay for the festive season.
The debts of Christmas past
Unfortunately, a number of people are still feeling the financial effects from last Christmas. Over a quarter (28%) spent more on Christmas last year than they had put aside, and as a result, one in seven (15%) went into debt.
The 18 to 34 year old age bracket was hit the hardest, with almost two fifths (38%) spending in excess of their means, and 20% consequently falling into debt.
Those who are still paying off their Christmas debt owe an average of £201 each – substantially more than last year when people owed an average of £182 from overspending the previous festive season.
A third (33 per cent) who are still in debt owe over £251, and 18% owe between £201 and £250.
Kevin Mountford, banking expert at MoneySuperMarket, says: “Our research shows that consumer Christmas spending is set to rise this year. It’s a time of year that’s important to many of us, but we would love to see families managing their money in a way that doesn’t leave a debt hangover into the New Year.”
Using credit wisely
Mountford has some advice for those planning to use their credit cards for Christmas shopping.
He says: “Using one of the leading 0% purchase cards will give more time to pay off the balance without racking up interest on the spending.
“For example, Post Office Money has recently launched a market leading purchase card offering zero per cent on purchases for 27 months as long as you make a transaction within three months of the account opening. However, anyone taking up this option must ensure they plan to repay the debt before the interest free period expires.
Mountford adds: “Those who can afford their Christmas spending may benefit from using one of the leading cashback cards on the market to make even more from their Christmas spending, then clearing the balance when their bill arrives to avoid a big interest bill.
“For example, the American Express Platinum cashback everyday credit card offers five per cent cashback on up to £2,000 of purchases in the first three months, you just need to spend a minimum of £3,000 in a year to qualify.”
Predicted spend across the UK:
|East of England||£384|
|Yorkshire and Humber||£352|