We’ve been carrying out a series of research projects to find out how the cost of living crisis is affecting people and how they manage their money.
Our key insight found eight in ten people (81%) are cutting the amount they spend on gifts this Christmas and more than half (53%) won’t be able to spend as much on Christmas this year.
However, when it comes to going into debt to celebrate the season, people are more cautious, as only 17% were prepared to take out a loan or go overdrawn, and only 26% intended on using ‘buy now pay later’ schemes to help them through.
Instead, people are saving more than usual for Christmas this year, with a third increasing their savings pot and a similar amount (37%) planning to dip into their savings pot to cover the cost of the holiday season.
As well as cutting back on spend on gifts, three quarters of respondents said they would be reducing the amount of socialising they do and 28% would have less family and friends over this festive season.
Katie Johnson, managing director of savings at Hodge, said of the findings: “Christmas is supposed to be a joyous time, but it’s also highly stressful and very expensive.
“What’s heartening to see from the research, is it seems people are less willing to go into debt, with the element people are happiest to compromise on being the amount of money they spend on things, rather than spending time with loved ones at home.”
During 2022 we’ve been monitoring closely how people are spending their money, what they’re cutting back on, and how confident they are in managing their finances.
Following the release of our Cost of Living Whitepaper earlier this summer, we found people have been tightening their belts in a variety of ways, including cutting TV subscriptions, gym memberships, the amount of holidays they take and more.
Now this latest survey - which asked 2,000 people aged 20 to 50, and those above 50, with varying incomes - found similar trends emerging around the festive season too.
Katie continued: “What’s become more and more apparent, through all of our work around the Cost of Living crisis during 2022, is that no one is immune to the rising cost of living, regardless of their age or income.
“It has been, and will continue to be, extremely important for us to continue communicating with, listening to and truly understanding the pressures our customers are currently under, and this ongoing research is just one of ways we continue to do that.
“We all cope with things in our own way but getting the right professional help and advice at any time of the year, let alone with the added pressure of Christmas, is vital in helping customers come out unscathed and remain financially healthy.”