Almost half of consumers expect to feel financially anxious this Christmas because of rising costs, yet many remain determined not to cut back on festive spending. Instead, they are looking for ways to preserve their seasonal traditions through discounts, sales and, increasingly, credit.
This is according to new IPA Christmas research, published today (30 July), based on a nationally representative survey of 2,000 UK adults, which was conducted by Opinium between 19 and 22 May 2026.
Consumers are financially anxious about Christmas costs
The findings reveal that almost half (45%) of consumers expect to feel more financially anxious due to rising costs this Christmas, highlighting the continued pressure on household budgets during the festive season.
Festive spending increases
Despite these concerns, almost half (49%) of consumers say they will not be cutting back on anything this Christmas. This is up considerably from 42% last year and 45% in 2024. Just under half (47%) also agree that "Christmas is a time to indulge even if it means spending more than I should."
This sentiment is brought to life when looking at what consumers expect to spend on average this Christmas. According to the figures, this year consumers expect to spend an average of £647 on Christmas, which is £84 more than when the same question was first asked in 2024. Gifting accounts for 58% of the average Christmas budget, up three percentage points since 2024, while food and groceries account for 22%, up four percentage points over the same period.
Consumers search for savings and sales
With household finances under pressure, it appears that consumers are increasingly focused on making their money go further. When asked to choose which criteria are most important to them when deciding which retailer to shop at, 4 of the 5 top choices revolve around savings, including: Free delivery at 37%; Coupons/discounts (24%); Price match (20%) and Free returns policy (20%). Meanwhile Trusted retailer came in second place at 33%.
Many shoppers are also turning to the sales to make the most of their festive budgets. Twenty-two per cent say they will spend up to half of their overall Christmas shopping budget during Black Friday, up from 16% in 2025 and 14% in 2023. A further 27% plan to take advantage of the Boxing Day and January sales, continuing a trend seen in recent years.
Consumers turn to credit
The research also points to a growing reliance on credit and alternative payment methods. Fifteen per cent of consumers plan to use a credit card to help fund their festive spending, up from 13% in 2024. Meanwhile, 14% intend to use Buy Now, Pay Later services, compared with 9% two years ago. The trend is particularly pronounced among younger consumers, with 20% of Gen Z and 22% of Millennials planning to use Buy Now, Pay Later this Christmas.
Consumers seek practical presents
There are also signs that consumers are taking a more practical approach to gift-giving. Forty-four per cent hope to receive practical or essential items as gifts, with the preference particularly strong among younger adults.
Commenting on the findings
Says Sophie Dimond, Senior Insight Lead, IPA: “As the adage goes, Christmas is a time for giving. Sadly, an adage that doesn’t necessarily factor in a cost-of-living crisis… As we can see from the data, while the desire to spend on the festivities is high, the reality is that times are tough for many so there is a danger that Christmas spend could turn into New Year debt. As such, brands should be mindful of the role they play here and the value they can bestow - on which note, it is interesting to see consumers are seeking out trusted brands – ie those that infer high quality and reliability, when it comes to the criteria they seek from a retailer.”
These are just some of the many findings contained within the IPA's 2026 Christmas Consumer Report, which is available to download - free to members and £150 for non-members.
Last updated 30 July 2026