Brits willing to stretch budgets for Christmas

By UK CreditCards.com

With Britain only just emerging from the double-dip recession in the second half of this year, one might expect a modest Christmas would be on the cards for many UK households. But October 2012 research from HSBC suggests the opposite is closer to the truth, with nearly half of Brits not planning to cut back on their spending at all this festive season and a further 20% estimating a bigger spend this year than last.

In fact, only 17% of adults expect to spend less celebrating at the end of 2012 than they did in 2011.

"Our research shows that once again households want to put financial difficulties to one side and celebrate this special time of the year," said George Charalambous, head of current accounts at HSBC, in a statement.

Covering the cost of celebrations
The bank's Christmas Spending Survey indicated that the average Briton intends to splash out £526 celebrating Christmas, with £347 set aside for gifts and £179 for food, drink and entertainment. That's only a slight shift downward from 2011, when average spending was £561.

While the majority of this spending will be covered by regular income and savings, approximately one in five people (17%) anticipate borrowing from one source or another to cover the cost of this festive splurge. Alongside overdrafts, plastic remains a popular choice (although slightly less popular than in 2011), with 0% purchase credit cards likely to be the forerunner among shoppers who want to spread out the cost of their festive celebrations.

Age and gender differences
While 77% of women say they will make attempts at being frugal (saving in advance and trying to research the best deals), just 64% of men say they plan to do so. Men are also slightly more comfortable using a credit card to pay for gifts and food at Christmas, with 15% of men (compared with 11% of women) expecting to use credit and store cards.

The 35- to 44-year-old crowd appears content to spend the most out of all age groups, which is unsurprising considering that many in this group will be funding Christmas celebrations for young children. Each person in this age bracket intends to spend an average of £219.21 on food and entertainment and £414.48 on gifts for immediate family members, putting their total spend more than £100 above the expected average (see chart below).

UK-christmas-spending

 

See related: Christmas in April? One in seven still paying for Christmas, Brits pay the price for multiple Christmas days

 

Published: 2 November 2012