Christmas shoppers feel the credit squeeze

Almost a third of people say they will spend less this Christmas following the recent turmoil in the financial markets, according to a new survey.

The second annual Cornhill Direct ‘Cost of Christmas’ survey revealed that last Christmas Brits spent on average £2,114 over the festive period - down 4.1% from the 2005 Xmas spend of £2,200.

The downward trend is set to continue this year with 30% of people pledging to spend less due to the ‘credit squeeze’.

The biggest chunk of the 2006 Xmas spend went on presents, with £1,059 being spent on friends, relatives and even neighbours and tradesmen.

The poll of 4,000 people by insurance firm Cornhill Direct also found that Brits splashed out £445.21 on festive food and drink and a further £193.66 was spent on Christmas parties and £92 on new outfits.

Festive shoppers also paid out £34.40 on wrapping paper and £43.14 on treats such as crackers and advent calendars.

Almost a third of people admitted going into debt every Christmas with 10% still paying off that debt the following December.

Simon Coughlin, a spokesman for Cornhill Direct, said: ‘It seems extraordinary that one day in the calendar can have such an impact on people's finances.’

Cornhill Direct is advising people to check that their contents insurance covers the extra value of the items in their home during the festive period. Cornhill Direct increases cover by 10 per cent during December at no extra cost.

Simon Coughlin added: ‘The concern for insurers is the potential for crime over the Christmas period. Official recorded crime statistics reveal an increase in domestic burglaries during the coldest and darkest months of the year. Householders should be even more security conscious than usual, keeping presents hidden away right up until Christmas Day.’