Majority of households rein in Xmas spending

The majority of UK households are limiting the amount they will spend on Christmas with eight in 10 saying they expect total spending (includes all Christmas expenditure) to be no more than last year, and almost a third (30 per cent) planning to spend less than in 2009, according to the MoneyMood Survey from Legal & General.

The MoneyMood survey also asked whether people were planning to keep to a budget for spending on Christmas festivities this year. Just over half (51 per cent) of those questioned said they were planning to keep to a budget, with the average spend per household coming in at £301, and four out of five who are budgeting saying they plan to spend no more than £500.

When asked how people intend to pay for Christmas festivities the top answers they gave are:

MoneyMood Survey Top ways to pay for Xmas

Cash - 82%
Savings account (Building Society or Bank) - 58 %
Credit card - 38%

Commenting on these findings Mark Gregory, Legal & General Executive Director Savings said; "Last month we reported that half of UK households, around 11.5 million homes, are budgeting on a fine balance between managing to pay bills and sinking into debt. So it comes as perhaps no surprise that in the current economic climate only 1 in 6 households (17 per cent) say they expect to spend more on Christmas this year. Our latest research suggests that households are taking a sensible approach to spending over the festivities and avoiding increasing debt. Perhaps, as a nation, we are improving our ability to manage the "spend now and pay later" culture, since the majority of Christmas spending appears to be coming from cash or savings rather than credit card debt. Although the season of giving is not normally a time of restraint for household finances its encouraging to see our MoneyMood survey reflecting a more prudent attitude to credit card debt in these straightened times. This should mean that, while we are still able to enjoy the festivities, perhaps fewer households will be paying off credit card debt in the aftermath of Christmas this time round."