The cost of a ‘cut-price Christmas’ is £182, according to new research. That’s two-thirds less than the amount spent by an average UK family.
New research by the charity Family Action, which provides services for vulnerable and disadvantaged families, reveals that many are planning to spend less than £100 on Christmas celebrations this year.
How the £182 cost of Christmas adds up
The £182 cost of a Cut-Price Christmas is based on buying basic lines in local shops for a family of two adults and two children. This is less than a third of what an average family expects to spend on Christmas. The majority of the families in the research project are set to spend between £100 and £200, with some paying less than £100.
The £182 cost comprises four different types of spending: food and drink, gifts decorations and cards. According to the survey, over £113 is budgeted for purchasing gifts, making up 62% of the total expense.
After estimating disadvantaged families’ weekly income and how much they have left over after basic spending on food, bills and transport costs, saving up for a Cut-Price Christmas would mean they have to save all their remaining income for two and a half weeks, and this is only if they are not faced with any emergencies.
On top of this, many parents in the focus groups are paying a poverty premium on Christmas because they lack bank account overdrafts or credit cards to spread the cost.
Many low income parents in the study have attempted to budget for Christmas in advance, but will be paying a ‘poverty premium’ because they have chosen ‘income lock-down options’ such as Christmas clubs, loyalty points and pre-paid vouchers, all of which offer no interest on savings, give no protection from inflation and limit shopping options.
- 10 tips to keep your finances in shape this Christmas – Citizens Advice and Barclaycard offer tips
- Family Action – find out how the charity helps vulnerable and disadvantaged families
- Credit unions – find out how you can save and borrow locally with a credit union