Christmas is set to blow a £1,500 hole in the average family’s budget this year, figures suggest. New research indicates the typical household expects to spend £693.80 on presents, £185.80 on Christmas dinner and a further £158.20 on snacks, sweets and treats. Once alcohol, low- and no-alcohol drinks, decorations and festive activities are included, the total cost reaches £1,502.
Costs up 29% on last year
The expected outlay is around 29% – a whopping £400 – more than households reckoned they spent on last Christmas. The rise comes as the price of food and energy, along with housing bills for many, have jumped in the past year.
Four out of five adults questioned in the study for Christmas savings club Park admitted they are worried about how they can afford to have a decent festive period this year.
Many plan to go into debt
More than a third are planning to go into debt to pay for it, either by using a credit card, going overdrawn, taking out a loan or borrowing from friends or family. Just 22% of the 2,000 people who took part in the study say they have been saving up during the year to pay for Christmas.
The looming festive squeeze comes as families continue to grapple with the cost-of-living crisis and higher everyday bills.
Younger adults plan to spend more
Despite the financial pressure, younger adults appear determined to celebrate in style. Adding together the individual spending categories, Gen Z households expect to splash out an average of £2,274, more than two-and-a-half times the £870 anticipated by Baby Boomers.
But younger adults are also far more anxious about how they will pay for it. Four in five Gen Z respondents said they were at least fairly worried about affording Christmas, compared with 68% of Millennials, 59% of Generation X and just 37% of Boomers.
Simon Birch, Park Christmas Savings’ director of prepayment, said: “With the cost of Christmas adding up, many families may be thinking carefully about how they can make the most of the festive season while staying within their budget. Christmas is an important time for families and everyone deserves the opportunity to enjoy it without putting unnecessary pressure on their finances. Planning ahead and spreading the cost can make it easier to manage spending and give people greater peace of mind as the festive season approaches. For Park customers, saving a little each week or month throughout the year can be a simple way to build up a Christmas fund. By setting money aside and ring-fencing it for Christmas, customers can spread the cost over time and have a little more confidence when the festive season arrives.”
