Festive present buying for children, partners and wider family and friends is set to be cut this year as people rein in spending, although grandchildren will largely be spared the Christmas spending cull.

Paragon Bank research of over 1,500 people revealed a net decrease in planned Christmas spending across most categories other than grandchildren.

Over one in five grandparents (21%) said they would be increasing the amount they spend on their grandchildren, compared to 12% who plan to reduce spending.

However, 18% of parents are planning to reduce the amount they spend on presents for children, with 14% said they would spend more. A fifth of people will cut the amount they spend on their partners, with just 8% planning to increase the amount they spend.

Wider family and friends fare worse, with 20% cutting back and 6% spending more, although over a third of people (36%) don’t buy presents at all for this group.

Food shopping is also set to increase, with 38% of people expecting to pay more for their Christmas food and drinks this year, whilst festive socialising budgets are largely being maintained. One in six (59%) said they will spend the same on socialising as last year, with 16% planning to spend more and 15% cutting back. One in 10 said they didn’t really socialise over Christmas above normal.

People also expect to reduce the amount they spend on Christmas events, such as pantomimes, light trails or ice skating. Although one in four (41%) said they don’t spend on these events anyway, 14% said they would reduce spending, compared to 7% who plan to spend more.

Of those people who plan to spend more this year, 34% said that they want to feel festive, with a similar proportion benefitting from increased returns from savings. Over a quarter (27%) had seen their income increase compared to last year, 18% had expanded families through births or marriage and 13% are hosting Christmas.

Of those reducing spending, 75% said the higher cost of presents was the main deterrent, with 52% citing reduced disposable income through increased household bills. Meanwhile, 42% said it was more expensive to socialise compared to previous years.

In terms of how people pay for Christmas spending, over half (54%) said they funded it through savings amassed through the year, 28% through salary, 26% through retirement income and 17% on credit card or loan.

Derek Sprawling, Paragon Bank Savings Director, said: “After a year of inflationary pressures, people are adopting a slightly more cautious approach to Christmas spending this year, with more people planning to cut spending on children, partners and wider family and friends compared to last year. Grandchildren seem to have more protected status, however, with a fifth of grandparents spending more.”

He added: “It’s pleasing to see that over half of people plan for their Christmas spending by saving throughout the year. With careful planning, proper budgeting and a pragmatic approach to the festive season, Christmas doesn’t have to be a financial drain.”

For further information contact:

Michael Clarke
Head of Media Relations
Paragon Bank
07740090746
[email protected]

www.paragonbank.co.uk 

Notes to editors:

Paragon surveyed 1,566 adults between 16 and 26 October 2023. 

Paragon Bank PLC a subsidiary of the Paragon Banking Group PLC which is a FTSE 250 company based in Solihull in the West Midlands. Established in 1985, Paragon Banking Group PLC has over £14 billion of assets under management, helping more than 340,000 customers to achieve their ambitions.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551.