New research released by the Competition and Consumer Protection Commission (CCPC) has shown that the average spending this Christmas by Irish consumers is set to fall by 13% compared with last year.
The CCPC commissioned Ipsos B&A to conduct the research, with the survey conducted over a two-week period ahead of Christmas in October. 1,035 interviews were conducted among a representative sample of the Irish population for the spending research.
It showed that 39% of people surveyed expected to borrow money to pay for Christmas, a figure which is up from 24% last year, while those with children reported the sharpest decline in expected spending this year – with anticipated Christmas spending back to levels seen in 2021.
Those with children aged under 18 will spend more than the average at €1,369, but that is a fall from €1,590 last year, with the research showing that the amount parents are spending is declining.
On average, the expected spend this Christmas by the average consumer was almost €1,030 – with around one in four people expecting to spend at least €1,250. The average spend is down from €1,186 in 2022.
Those aged 45-54 were intending to spend the most, with almost half anticipating a spend of at least €1,000, with average expected spend reaching €1,334.
A figure which remained unchanged in this year’s research was the number of those who said that the return period depends on the length of the product guarantee or warranty, which was over half of consumers.
More than four out of five of those expecting to spend more this year cited inflation as the reason – with an increase in prices pinpointed as the reason for spending more this year, with spending increasing by 10 percentage points between 2022 and 2023, and 25 percentage points between 2021 and 2023. 83 per cent of those surveyed said that things have gotten more expensive this year, citing this as a reason for increased expenditure.
Only 35 per cent said the reason for higher spending was because they felt they wanted to make Christmas “extra special” this year.
Feeling like “splurging” a bit more as a reason for expecting to spend more this year, meanwhile, was down by 10 percentage points in 2023 compared to 2022.
When it came to borrowing money for Christmas, ownership of lending products remained stable, while people reported a slight increase in owning savings.
85% of people, up from 76% last year, said they currently had savings, while 49% said they had some form of borrowing, a figure which retained stable on last year.
26% of savers meanwhile said they had a credit card balance – with those who were older more likely to report having a credit card balance – 31% of 45-54 year-olds, versus 15% of 15-24 year-olds. There was a similar age difference existing with respect to overdraft balances, with 19% of 45 to 54-year-olds reporting having an overdraft, compared to 2% of 16-24-year olds.
‘Buy Now Pay Later’ schemes were reported for 3% of consumers surveyed, while 9% of people reported using no financial product as a means of borrowing.
A loan or a bank from a credit union was the most common form of borrowing, sitting at 26 per cent. While 27% of men had an investment product, this compared with 16% of women.
73% of people surveyed reported that they would use their savings to fund their Christmas spending – while 29%, up from 24% last year, planned on using some form of borrowing.
80% of respondents with savings said they would be used to fund their Christmas shopping, while 43% of those with a credit card said it would be used to fund their spending this year – up from 39% last year.
With the countdown to Christmas on, the Competition regulator said that people would not be alone in not knowing how they will cope financially this year.
“The pressure of Christmas parties and events combined with buying presents for loved ones can easily push people into debt,” the agency said as it released a number of budgeting tips to help people over the festive period.
Tips included setting out a budget which detailed day-to-day spending over the coming weeks; cutting down on daily expenses; making a gift list to ensure time to shop around and compare prices online; choosing a credit card option wisely so as to ensure not getting into debt; and being careful with credit cards, with credit card interest rates among the highest.