In the not so far off distance, nestled between the sound of crackle of bonfires and the eager arrival of the Easter bunny, you can almost hear the jingling bells of Christmas. While children write letters to Santa and fill up on advent calendar chocolate, we grown-ups know that the holidays come with a price tag. But right approach and a solid festive plan, you can bring back the Christmas merriment without so much financial stress.

How to save for Christmas

Starting early when saving for Christmas will make it easier to hit the financial target you’re aiming for. But if you haven’t started stocking up your savings yet this year, you’re not alone. Hodge research in April 2024 found that most people will be planning to spend anywhere between £100-£500 over the Christmas period, but only 16% of people claimed to be saving for Christmas. So, if you need to start decking out for presents, decorations, Christmas events or your festive food shop (or all the above), then wrapping up your savings plan early is key.

Top saving tips

To make saving for Christmas a little easier, here are some top tips in time for the festive season:

  • Set your Christmas budget

    Work out how much you’ll need to save money for Christmas. Break down the costs to make it easier, from food, social, gift buying and other expenses.

  • Create your savings plan

    Once you have your financial goal in mind, it’s time to plan out how to get there. An easy way is to count the weeks (or months) until Christmas, and then divide the total by your goal. This will be the figure you need to work towards saving every week / month.

  • Open a savings account

    The next step is for you to choose a savings account that works for you. If flexible saving works for you, an easy access savings account could be a great fit. If you’re a forward planner and would like to lock money away for the future, a fixed-rate ISA or Bond is worth delving into. Take a look at Hodge savings account.

  • Automate your savings

    Set up a regular standing order to automatically transfer money to your savings account, you can stay on track and help you manage the temptation to spend the money elsewhere.

  • It's not all about the gifts

    Saving can help with Christmas planning, but it's really about spending time with loved ones and creating memories. That's what we'll remember in years to come.

How does a Christmas savings account work?

Christmas savings accounts and savers clubs are designed to help you save specifically for the holidays. By depositing money into these savings account throughout the year, you build up the amount you need and typically, can then withdraw it a month or two before the Christmas period, giving you plenty of time to start shopping. As these accounts want to encourage you to leave your money untouched for Christmas, they may have restrictions or fees on early withdrawals.

A great alternative is a regular savings account such as an easy access account. In general, they will provide you with a safe place to store your money while earning interest, helping you grow your savings ready for the festive season. Paying into savings pots or easy access savings accounts can work just as well, just take your time to work out which option is best for you.

Choosing a Christmas savings account

Choosing the right savings account for you can have a big impact on the kind of saver you become. Here are some options to consider and if you still want to explore a little more, you can find out what type of savings accounts you need here.

1. Easy access savings account

Easy access accounts allow you to deposit and withdraw money when it suits you. This can be helpful if you’re a flexible saver who may want to switch up the time and amount you deposit into your savings account each month. As they are easy access, you can also withdraw your savings when you choose, for example, if you plan to start your Christmas shopping early.

2. Fixed-Rate savings accounts

Fixed-rate savings accounts like ISAs or Bond, require you to lock your money away for a set period, usually 1, 2, 3 or 5 years. They can offer higher interest rates and can a great option if you want to be disciplined with your Christmas savings, as you won’t be able to access the money until the end of the term. If savings bonds are a new concept to you, find our more about how savings bonds work here.

3. ISAs (Individual Savings Accounts)

If you’re looking for a tax-efficient way to save money, a Cash ISA is worth considering. Any interest earned within the ISA is tax-free, which can make a noticeable difference to your savings pot over time. ISAs do have annual contribution limits, currently this is £20,000, so above this and you won’t benefit from tax-free savings. Overall, they could be an excellent option for boosting your Christmas savings. Find out more about the three benefits of saving with an ISA here.

Be an early saver for Christmas 2025

Before we know it, we’ll be wrapping gifts and tucking into mince pies as we celebrate Christmas 2024. But it’s never too early to start thinking about next year. Opening a fixed-rate savings account or squirreling away a little into an easy access account now for Christmas 2025 can help you plan ahead. This time next year you could have full peace of mind when it comes to the expenses of Christmas– the ultimate present under the tree!

Start saving with Hodge

At Hodge, we offer a range of savings accounts to help you reach your Christmas savings goals. However, you want to get there, it’s all about starting. Let us help you start the journey with a  Hodge savings account.

 

 

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