Half of people (46%) used credit cards, overdrafts, store cards or payday loans to cover Christmas spending this year, according to new Which? research, while over a third (36%) dipped into their savings.
With food and energy costs continuing to rise, our survey into Christmas spending found people aren’t feeling positive about the New Year either, with more than half (54%) of people expecting their household budgets to be even tighter in 2013.
Dipping into savings to pay for Christmas
Key findings of the new Which? poll include:
- Almost a quarter (22%) said they could only afford to pay for Christmas by using credit cards and overdrafts.
- Those who dipped into their savings took out an average of £380 while those who used credit to cover Christmas costs borrowed an average of £301.
- 12% used authorised overdrafts, 8% used store cards and 5% of people borrowed money from friends or family.
Over half cut back on Christmas spending
In addition, the poll of 2,100 adults, conducted for Which? by Populus between 19 and 21 December, reveals that:
- Over half (56%) spent less on Christmas this year than last year, with 43% saying they significantly cut back spending.
- Half (48%) of people didn’t buy as much food and 45% bought less high quality food than last year because of increasing food prices.
- Six out of 10 (61%) people felt this Christmas was financially tougher than last year, however three quarters (75%) said their Christmas wouldn’t be any worse for having less money to spend.
- 92% agree that people generally feel under pressure to spend too much at Christmas.
Which? executive director, Richard Lloyd, said: ‘Most of us like to splash out on family and friends at this time of year so the news that millions of people have drastically cut back on Christmas spending or taken out loans to cover Christmas costs shows just how squeezed household budgets are right now. It also shows how far we are from a consumer spending-led economic recovery.’