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Nearly half of Brits do not have a budget in place for their Christmas shopping this year, with many likely to rely more heavily on debt, research suggests.
On average, Brits expect to spend £285 each on Christmas presents this year, – down just 5% from £299 in 2019. However, 45% do not have a budget in place for their festive shopping this year, according to a survey of 1,754 UK adults by personal finance platform NerdWallet.
Just under a third (32%) of people said they will buy Christmas presents on a credit card, while 12% plan to take out a loan.
One in five (19%) anticipate taking on more debt than usual over the upcoming Christmas period – a figure that rises to over a third (34%) of those aged between 18 and 34.
This is despite that fact that two in five (38%) celebrators will not be buying presents for friends and family they are unable to see this year, the research found.
Additionally, nearly a quarter (23%) will be cutting back on their festive spending due to having been furloughed or made redundant as a result of the COVID-19 pandemic.
John Ellmore, UK director of NerdWallet, said: “The financial hardship brought about by the pandemic could see more people take on debt this Christmas. Our research shows Britons are determined to maintain the amount they spend on presents, regardless of COVID-19 and its effect on their incomes. However, this might result in a greater reliance on credit cards and loans.
“Taking on debt to cover the cost of Christmas is not unique to 2020 – it’s an annual occurrence and a reasonable way of managing this costly time of year. But it is of some concern to note that so many people have no clear financial budget in place for the festive season.
“Spending beyond one’s means or taking on bad debt that cannot easily be repaid are dangerous financial ploys at any time of year. It’s important people take stock of what they can afford to spend, particularly if their income has been affected by the pandemic. They can then ensure they do not over-stretch themselves – no one wants to start 2021 with a financial hangover.”
Watch: Should I pay off debt or save money during the coronavirus pandemic?