Home Business News Christmas economy to drop by £13bn ‘with half of UK adults reducing their spending this year’

Christmas economy to drop by £13bn ‘with half of UK adults reducing their spending this year’

by LLB Finance Reporter
16th Oct 23 11:19 am

Christmas 2023 is set to be one of the most frugal ever, with nearly half of UK adults (45%) planning to cut their overall spend.

They will be reducing it by a significant sum – on average £280 less than last year. Across the UK this equates to around £13 billion* less being spent by consumers compared to Christmas 2022, suggesting that for many, the cost of living crisis is having even more of an impact than it was 12 months ago.

The research comes from the UK’s leading cashback site TopCashback, and reveals that amongst those reducing their spending, they plan to do so by more than a quarter (26%) compared to 2022. Overall, 26% have less than £300 in total to cover all of the costs associated with Christmas, from presents and decorations, to their Christmas tree, food, drink and travel.

As a result, over half of UK adults (54%) are worried about being able to afford Christmas this year, leading many to scale back on the festivities. Of those planning to spend less, two fifths (41%) say they already feel like a failure as they can’t afford to celebrate how they would like to. Furthermore,  a third (34%) believe that as a result, their Christmas won’t be as fun or as happy.

This is set to have an impact on a large proportion of children up and down the UK – more than half (52%) of parents say they already feel guilty about letting their kids down this Christmas. Heartbreakingly, one in twenty (5%) parents plan to tell their children that Father Christmas is ill this year to adjust their present expectations.

Of course, Christmas isn’t just about presents – it is about getting together with family and friends. But tight budgets could also put this under threat, as a quarter (26%) of people are planning to avoid having friends or family around in order to save on hosting costs. And nearly a fifth (18%) say they are not planning to travel to see friends or family to save on travel costs. Almost one in ten (8%) will even avoid seeing some family members or friends to save having to buy them a present.

Many are also already concerned about their energy bills this Christmas and will be taking steps to save money on them. Nearly a fifth (19%) will use an air fryer to cook some or all of their Christmas meal, while almost a sixth (15%) won’t put any Christmas lights up to keep costs down. Furthermore, one in ten (9%) will even forgo a Christmas tree to save cash.

With the cost of living front of mind, over half (53%) of people wish that they had started saving for this year’s Christmas expenditure sooner than they did. This has led three quarters of UK adults (75%) to say they would consider alternative ways of earning extra money to pay for it this year.

Of those, half (49%) say they will consider selling their clothes or other possessions whilst 45% will take up another job or start a side hustle. However, some forward-thinking people are already thinking about funds for next year – a fifth (19%) say they are already saving for Christmas 2024 to help alleviate the pressures.

Commenting on the research Adam Bullock, UK Director at TopCashback, said: “Christmas should be a joyous time of year to celebrate with friends and family. But it’s upsetting to see how many people are worrying about the cost right now and are planning to miss out on precious family time as a result.

There are simple changes that can be made to help keep costs down – whether that’s swapping turkey for roast chicken or setting a small budget for gifts. It pays to start thinking about Christmas savings earlier too, so whether you’re looking for discount codes, making use of cashback or using brand loyalty schemes; all these things soon add up and mean you can get more out of your celebrations this year.”

To help people kick-start their Christmas spending pots, TopCashback is sharing £7,500 worth of savings across the UK. This week, hundreds of origami hummingbirds will be released in London, Manchester and Birmingham, each containing a £10 note for consumers to add to their Christmas budget.

Those who find the birds can also redeem an additional £15 when shopping over 6,000 brands through TopCashback. So if you find yourself in any of these cities this week, keep your eyes open for one of the TopCashback hummingbirds. And if you don’t, why not sign up to TopCashback yourself to do your Christmas shopping this year and see how much you can save.

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