London 30th November 2011 - Research* by leading online credit information provider, Equifax, reveals that nearly a third (30.7%) of consumers believe they will spend less this year on Christmas gifts and celebrations, with over a quarter (26.9%) saying they aim to spend between £250 and £500 on presents and other expenses over the festive period. The Equifax research also found that nearly two thirds of respondents hoped for a VAT cut to stimulate spending - after yesterdays Autumn Budget Statement it appears they will be disappointed!
The latest Equifax data is probably not surprising, given other pressures on family finances this year. But it will be another concerning sign for UK retailers.
The Equifax research does, however, appear to suggest a spirit of living within their means for many consumers this Christmas. Nearly 30% say they will use savings to pay for gifts and festivities, rather than taking on new credit, perhaps also reflecting the low interest currently earned on savings.
For those planning to pay on credit and store cards, nearly 30% aim to pay off the debt within a month. Only 8.8% said it will take 3-6 months to pay off their Christmas spending although 7.5% also said they are still paying off last year’s debts!
“As we know, keeping on top of finances can be a real challenge and a juggling act at the best of times,” says Neil Munroe, External Affairs Director of Equifax. “It appears that the extra financial pressures consumers are now facing have forced many to review the amount of disposable income they have. In order to help ensure they do not get into serious financial difficulties, many, as a result, are not planning to splash out this Christmas.”
60.4% of respondents to Equifax’s survey plan to spend about the same amount of money on this festive season as they did last year.
“It’s encouraging to see that consumers are trying not to overspend when finances are being stretched in so many different directions and when there is such uncertainty with their future level of income.”
*Source - Equifax 2011 Finances Survey - 1,166 respondents
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