Experts predict downturn in Christmas spend

05/11/2008

Many Britons are living a "hand to mouth" existence at the moment - and are not putting money aside for Christmas as a result.

This is the main finding of new analysis from money website Fool.co.uk, released today.

David Kuo, personal finance expert at the site, said that the continuing economic downturn, caused by the credit crunch, was to blame for the trend.

He added that it was "becoming increasingly difficult to plan ahead by putting money to one side" and that families should budget better as a response.

The comments follow the release of research from Birmingham Midshires, which showed that the average Christmas budget has dropped from £706 in 2007 to just £604 this year.

According to the lender, almost eight in ten Britons are planning to make some form of cutbacks to their upcoming Christmas celebrations, in order to save money.

Mr Kuo added: "Most of the families may find that with rising energy bills and all the other cost; motoring insurance and off course inflationary food prices.

"What people need to do between now and Christmas is to budget in some ways, in other words to try and find out how much they think they will be spending on Christmas presents this year and try find the money from somewhere because ultimately you don't want to go into the New Year with a huge amount of debt."

Commenting on the data, EuroDebt director Kevin Still said that there is "no doubt" that consumers are "feeling the pinch".

He added: "Credit card rates on new transactions have gone up with many card issuers and this may cause a nasty sting in the tail of Christmas purchases.

"Our advice would be to budget carefully and set reasonable expectations for kids and inter-family present exchanges. The old adage that it’s the 'thought that counts' may see a revival this Christmas and New Year."

Tags; Housing Debt and Bills, Young Family Finances, Retirement Money Problems,

Regional Debt Advice; Debt Advice Birmingham,

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