Britain has had a tough year and Britons are feeling the pinch. Twenty-two million Brits are planning to cut back on Christmas presents for loved ones this year as the cost of living crisis bites.
Our annual Christmas poll, carried out for the Centre for Social Justice (CSJ) by Opinium, reveals a shocking deterioration in families’ Christmas spending plans compared to last year – with a doubling from 11 to almost 22 million people (22% vs 42%) planning to cut back on presents due to fear of otherwise getting into debt.
Such is the fear, when respondents were asked if they are worried if they will fall into unmanageable debt because of the costs of Christmas there was a similar almost doubling compared to last year – with three in ten admitting they are worried (29%).
Because of these fears, the poll reveals that over one in five (22%) would now prefer Christmas to be cancelled this year altogether: the equivalent of 11.5 million people in total, a significant 3.5 million rise on last year. Strikingly, this rises to almost three in ten amongst younger adults aged 18-34.
This comes as increased cost of living pressures and high inflation mean families have decreased disposable income. Research by the Office for National Statistics shows that parents and those who live in deprived areas are most likely to have to cut their spending on essentials, dig into their savings and use more credit than usual.
In our recent report, Over the Odds, we revealed that up to 7 million people on low incomes are paying multiple poverty premiums. This is where they pay more for basic goods and services, such as energy, food, or insurance, sapping away greater proportions of their income.
Christmas may be a time for giving, but for millions of people, there’s not much to celebrate. While the government is to be applauded for making a number of special provisions for those with the least, these are desperate times for the most vulnerable in our society, with many of those just about managing being dragged down into problem debt. To start to tackle the cost of living crisis and give families hope to get through winter without falling further into serious debt, we recommend:
- Restoring Work Allowances in Universal Credit to their pre-2016 levels, an effective ‘tax cut’ for 1.3 million of the poorest households worth around £450 on average, aimed at helping more claimants move into work.
- Ensuring energy firms proactively reach out to customers on more expensive pre-payment meters to use their government energy bill support vouchers.
- Widening uptake of “social tariffs” on utility bills for those who are eligible.
- Ensuring banks support financial inclusion bodies to promote access to affordable regulated credit.
- Review how to boost uptake of the Help to Save scheme, a government-backed savings scheme offering a 50 per cent uplift on savings, helping consumers build financial resilience.