Many cutting back spending but still believe it’s the season to celebrate

• Almost half of Brits (45%) expect to spend less this Christmas compared to last year due to the rising cost of living
• TSB data shows some will increase use of Buy Now, Pay Later to pay for Christmas
• Households with three or more children are almost twice as likely to use debt to pay for the festive celebrations than the national average (18% vs 10%)

Despite the cost-of-living crisis more than half of Brits (53%) are still looking forward to Christmas according to new research from TSB.

In the survey of 5,404 adults aged 18-75 in the UK, data shows that people are feeling the squeeze too, with six-in-10 (61%) feeling financially worse off now than they did a year ago. As a result, households are planning to be more prudent on their spending to celebrate Christmas or the festive period this year, with almost half (45%) intending to spend a little or much less and a further third (35%) planning to spend roughly the same amount as usual. Only 12% of people are planning to spend more than they did last year, while 5% don’t celebrate Christmas or the festive period around Christmas.

Over half (53%) plan to finance their festive spending from normal day-to-day expenditure, with a quarter (26%) using savings specifically set aside for Christmas. One-in-10 (10%) expect to use debt (loans, overdraft, buy now pay later, credit card to be paid back over time) to cover costs over the festive period, with those with children in the household more at risk (15%) than households without children (7%). TSB found that, on average, households with three or more children were almost twice as likely to take on debt than the national average, or almost three times as much than households without children (18% vs 10% vs 7%).

These findings come as TSB’s own data shows that the run up to Christmas is typically accompanied by a spike in the use of buy now, pay later (BNPL) services. Across all BNPL providers tracked by TSB, there was a 40% increase in the number of customer transactions seen in December 2021, compared to the number in October 2021.

Carol Anderson, Director, Branch Banking of TSB said:

“Christmas is clearly still a wonderful time of the year for most families, but the rising cost of living means many will be spending less than in previous years. Those using debt to help pay for Christmas should plan that carefully so they know they can afford the repayments, avoiding a new year hangover.”