Average household set to spend £787 on Christmas – tips to slash costs

This Christmas is set to be one of the most expensive yet. New research from thinkmoney shows the average household will spend £787 this festive season; that’s £87 more than last year. But despite spending more, many feel they’re getting less for their money. In fact, almost a third of Brits (30%) say they’d cancel or delay Christmas if they could as pressure to spend on gifts mounts.

People aged 35-44 face the highest average spend at £1,115 and are most likely to want out as a result. Around 37% of them would cancel Christmas given the choice.

Regionally, Scots are budgeting the most at £1,019, while the East Midlands comes in lowest at £566.

How are families funding Christmas this year?

While many people will be using their regular income or savings to fund Christmas, a good chunk will be supplemented by borrowing. In fact, 25% said they’d use credit cards to foot the Christmas bill, while 14% will use Buy Now Pay Later (BNPL) schemes and 7% will borrow from friends and family.

But here’s the worrying part; only 22% expect to clear their festive bills by the end of December. Our research found that:

• 21% will still be paying off Christmas in January
• 18% expect debt to last into spring or summer
• 3% could still be paying off Christmas as late as August 2026

Vix Leyton, thinkmoney’s consumer expert, said: “This is shaping up to be one of the tightest Christmases in recent memory, and unfortunately for Brits, the rising cost doesn’t mean more trimmings.

“Despite spending more, families are unfortunately finding their money has never been worth less with the cost of living putting pressure on already limited budgets.

“But before putting Christmas on credit, it’s worth weighing up exactly what’s important to you and what’s just noise. For the essentials, planning early is key to create the biggest run up and bag the best bargains, and remember that Christmas is about celebrating with the people you love, not how much you spend.”

7 tips to slash costs and stay out of debt

The good news is, there are ways to slash costs and stay out of debt if you’re worried about funding Christmas.

Below Vix shares her top tips for keeping Christmas joyful without breaking the bank.

Make a master list now

Write down everyone you plan to buy for – family, friends, teachers – and set a realistic budget for each. This list is your anchor. It stops duplicate buying, overspending, and helps you grab deals confidently.

Get the gifting conversation going early

Talk to friends and family about expectations. Suggest ideas like:

• only buying for kids
• doing a family Secret Santa
• setting a price limit on presents

It might feel awkward, but these chats take the pressure off everyone as more people grapple with the cost-of-living crisis.

Shop slowly and spread the cost

Avoid panic buying gifts at the last minute. Plan ahead and pick up one or two gifts each payday. It keeps your budget under control and reduces the risk of falling into the December credit trap.

Sign up for newsletters and alerts

Retailers often share secret sales and free shipping codes with subscribers. Create a dedicated “shopping” folder in your inbox so it doesn’t get messy.

Max out loyalty schemes and stack deals

Use points-based schemes like Nectar, Tesco Clubcard, or Boots Advantage. Combine them with cashback apps like TopCashback or Quidco for extra savings.

If you have a thinkmoney SmartPlus account, you get access to PlusSave which gives you up to 30%^ off gift cards for hundreds of retailers.

^Offers are subject to change and may vary. Check the thinkmoney app for the latest offers.

Check out resellers

Platforms like Vinted and charity shops often have brand new or nearly new items at lower prices. They're perfect for buying toys, clothes and collectibles. Just check seller ratings and delivery times.

Pick up little things as you go

Stocking fillers, wrapping paper, and cards add up fast. Grab multi-buys or value packs early to avoid last-minute splurges. You can add bits to your weekly shop in the weeks leading up to Christmas to spread the cost.