Nationwide Current Accounts survey has found that Brits are on average spending five months repaying Christmas debt while one in 10 take a year or more.
The average cost of Christmas per family is £687.40 – covering everything from gifts and Christmas dinner and the work party. 51% of people surveyed expect to spend more than they earn in December.
The poll also shows the average time spent recouping Christmas debt is five months. However, 34% took over six months of this year paying off last Christmas, while one in 10 have 2016’s debt still hanging over them – taking a year or more to repay.
While 62% have a budget in mind for Christmas, 45% think they’ll be able to stick to the limit. 44% of savers will use their reserves to fund Christmas, while 24% use a credit card. 6% have used a loan to cover Christmas.
The anticipated cost means many buy presents in advance, with 48% doing so to spread the cost.
While the average Brit starts to stock up for Christmas three months out from 25 December, 18% purchase presents six months or before. A further 8% prepare nine months or more ahead. However, 18% still leave it until December before preparing.
Despite the mounting costs of Christmas, 70% refuse to cut back on spending this year, instead preferring to face the financial consequences in the New Year. 54% say they will cut back spending in January, with 32% saying they are planning to spend more nights in to save money.
Christmas Day online shopping is the new tradition, with 30% giving in to their spending urges and parting with an average of £179 each an increase of £122 compared to last year, and £102 more than they spent on Black Friday last year. Nationwide customer data also confirms the trend of spending on 25th December, with debit and credit card customers spending just over £20 million last year, £3 million pounds more than in 2015. The poll also suggests men will be the biggest Christmas Day online spenders, planning on parting with £202, compared to the £155 for women.
When it comes to what people want to buy online on Christmas day, 22% plan to impulse buy, 36% plan to buy clothes/shoes/fashion accessories, while 22% plan to buy gadgets such as tablets, mobile phones and satnavs. The top three reasons people gave for Christmas Day shopping were wanting to get the best bargain (13%), wanting to spend their gift money (12%) and shopping out of sheer boredom (9%).
However, just 2% planning to shop online between midday and 1pm, compared to 20% who shop before 10am and a quarter (25%) between 6pm and 9pm,.
John Hutton, Nationwide’s director of payments, said: “Christmas is one of the most expensive times of the year, with expectations running high on presents, nights out and visits to family and friends. Our research shows that many people are spending beyond their means in order to have a fantastic day, with many taking months to repay the costs.
“We’d always advise sticking to a budget and where possible use savings or spare cash to help cover the costs in the first instance. However, borrowing doesn’t have to be a last resort – using a credit card might actually be an effective way to cover costs. Plus, you’re also protected through Section 75 on goods costing between £100 and £30,000. But make sure at least the minimum is paid off each month to avoid additional interest and ensure you are able to pay off the costs in full.”