Nearly two thirds (62%) of British people say they will change their Christmas plans due to the cost of living crisis, according to new research from smart money app Plum.
This includes a third (33%) buying products on sale and one in four (26%) cooking everything at home.
The impact of high prices is affecting people’s festive social schedule too, with almost one in five (18%) Brits avoiding hosting at Christmas this year. Meanwhile, one in six (16%) in the UK is considering skipping Christmas altogether, rising to over one in four (28%) among the 18-24 age group.
On average, British people spend £655.20 on their Christmas celebrations. However, less than half save ahead for the festivities, with just 43% in the UK having set money aside specifically for Christmas.
This year, the country is facing a significant financial squeeze, with around 70% saying they have noticed price increases for Christmas groceries. For British people, eating out at Christmas is the second most notable financial increase, with more than half (51%) noticing it has become more expensive, followed by Christmas drinks (49%).
This might help explain why many people are turning to credit to fund their festive spending. Nearly a quarter (24%) of British people are considering using a credit card or loan to pay for Christmas expenses.
When it comes to cutting back among those who have noticed changes in prices, British people are more likely to:
- Eat out less (36%)
- Cut back on presents for adults (28%)
- Spend less on drinks (24%)
As for Christmas dinner itself, one in three (30%) Brits would cut out the festive tipple like champagne to save on costs, with just 3% willing to compromise on the main meal to make extra savings.
Rajan Lakhani, money expert at Plum, said, “Whatever you’re planning on filling your trolley with in the run up to Christmas, you’ll be having to make those pennies work harder this festive season. Inflation is still running high and affecting the price of everyday items. In the UK, the cost of eating out has increased steeply so people may be looking for other options to celebrate this year.
“It’s particularly worrying that people are going into debt to fund the festive season. With interest rates so high, any debt you take out may end up costing you a lot more over time. If you’re feeling stressed about your finances in the upcoming months, you may take some comfort and inspiration in knowing that others are planning to cut back. After all, Christmas is about more than just spending, and the last thing your loved ones will want to see you in financial trouble.
“Apps like Plum are a great way to make sure you’re staying on top of your Christmas spending. As well as setting up saving pockets in advance and earning up to 5%+ interest to boost your cash, you can also track your income and outgoings in the app as the festive season continues.”
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