December 4, 2020 12:01:00 AM
Just under four in 10 families with children living at home are cutting back on their Christmas spending this year, according to a survey.
Some 38% of these families will spend less this festive season compared with last year, comparethemarket.com’s household financial confidence tracker found.
Nearly half (46%) of families with children who expect to cut back this Christmas said they simply cannot afford to spend as much as normal due to the financial hit from the coronavirus pandemic.
In a further bad sign for crisis-hit high streets, nearly four in 10 (38%) UK households surveyed said they will do all their Christmas shopping online this year – a big rise on the 9% of people who shopped exclusively online for Christmas gifts in 2019.
Seven in 10 (70%) families with children living at home plan to use day-to-day spending money to pay for Christmas this year but nearly a third (31%) will dip into rainy day savings.
Nearly a quarter (24%) will rely on credit cards and nearly one in 10 (9%) plan to use alternative credit schemes, such as buy now, pay later products, which means they will still be paying for Christmas 2020 in 2021.
More than a quarter (27%) of families with children at home found it difficult to pay bills in the past month, compared with only 17% of households with no dependent children.
As a result, nearly a third (32%) of families with children at home have dipped into savings to cope with day-to-day budgeting and two-fifths (40%) of parents have looked at how they can save money on bills and subscriptions.
Looking to the new year, nearly a quarter (23%) of families with children living at home are worried about being able to pay their household bills over the next few weeks.
In the longer term, households feel more optimistic.
After a string of announcements related to vaccines, more than two-thirds (67%) of households said they now feel generally more confident about 2021.
Ursula Gibbs, director at comparethemarket.com, said: “Many are taking a sensible approach and cutting down on Christmas spending to compensate for a loss of earnings or higher bills.”
She added: “Thankfully, the positive news about the vaccine offers some hope and gives households more confidence that 2021 will bring good news – for healthcare, society and our finances.
“However, most of us will be very glad to see the back of this year.”
More than 2,000 people were surveyed across the UK in November.