Money News

Consumers set to spend record £47bn this Christmas

Wednesday 14 December, 2011

By Martin Fagan

But £6bn will be withdrawn from savings accounts and 10m Brits will be pushed into the red on cards and overdrafts.

Despite squeezed household budgets, shoppers are expected to loosen the purse-strings and splash out on festive cheer this Christmas.

However, for many, Christmas indulgences will be paid for by raiding the savings account or - more likely - going into the red on credit cards and overdrafts.

Barclays predicts a record £46.9billion will be spent this month - the equivalent of £17,540 a second and a 4% increase on December 2010.

A total of £18.3billion of cash is expected to be withdrawn from the UK's ATMs and banks throughout December. The busiest day for spending is predicted to be Friday 23rd December, when Barclays expects over £1.4billion to be spent. The peak time for ATMs is forecast to be between 11am and 12pm on that date, with £24,890 being withdrawn every second.

However, Britons say they will withdraw over £6billion from their savings to cover the cost of Christmas this year. According to Santander Savings, 14% of savers say they will withdraw almost double from their savings compared to last year.

Those with no savings will be forced to go into debt, with almost 10 million UK consumers likely to be tipped - or pushed further - into the red this Christmas, according to comparison site MoneySupermarket.com.

Overall, of those in worsening debt, 69% said they will resort to spending on a credit card, 23% plan to use their overdraft and 9% will take out a loan to tide them over.

“Our research suggests that, although people are currently being forced to dip into their savings, their general attitude to saving and spending money is relatively cautious,” said Matt Hall, head of savings at Santander.

“When asked what they would do if given £1,000 tomorrow, 29% said they’d save it for a rainy day.”

Tim Moss, head of loans and debt at MoneySupermarket.com, said: “This year has been incredibly tough for consumers with the rising cost of living really hitting the Nation’s wallets hard. It comes as no shock that such a high number of people will be tipped into debt this festive season.”

The website’s research revealed Scotland to be the region which saw the greatest increase of consumers in Christmas debt. This year, 47% of Scots will find themselves owing money compared with 38% in 2010.

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