Nearly one in three Scots will struggle to afford Christmas this year

Squeezed household finances and the highest level of inflation for decades have resulted in fewer than one in five (18%) of Scots saying they will comfortably be able to afford Christmas this year, compared with 44% last year.

The survey by YouGov for StepChange Scotland shows nearly one in three (30%) Scots saying they expect they will struggle to afford Christmas, with a further 31% saying they will have to cut back on their normal expenses to fund their festive spending. Three per cent say they won’t celebrate Christmas at all this year due to cost.

With living costs now taking up such a large proportion of people’s incomes, one in eight (12%) Scots will be relying on credit this Christmas, nearly double the proportion (7%) from last year.

Head of StepChange Scotland, Sharon Bell, said: “While it can be a special time of year to celebrate with family and friends, Christmas can also be a financial strain, with many feeling pressure to spend beyond what they can afford. This year, with household budgets already stretched to their limit by the cost of living crisis, consumers may be especially at risk of being drawn into using short term credit products which are widely advertised as a way of funding a happy Christmas.

“The reality is with no sign of inflation easing, and energy bills set to rise further into 2023, taking out unaffordable credit over the festive season may only lead to a debt hangover in the New Year and beyond which may prove difficult to overcome. Most years, StepChange sees demand for debt advice leap by around 50% between December and January, but there may be steps you can take to reduce the risk of a New Year debt hangover.

“Everyone is feeling the pressure on their finances right now, so it’s worth exploring with your loved ones how Christmas can be celebrated in a way which doesn’t risk anyone experiencing financial problems in January.

“If you’re thinking about using credit cards or Buy Now, Pay Later to fund your festive spending, do pause and consider whether you will be in a position to comfortably meet the repayments. If you’re worried about your finances, you don’t need to suffer in silence – and you don’t need to wait until January.”

To help people navigate the Christmas period, StepChange Scotland has also put together a package of tips.

StepChange’s Top Christmas Debt Tips

  • Go through your budget to look at what you can realistically afford to spend over the festive period. This is a really helpful way to identify how much money you have spare to go toward Christmas planning. StepChange has a step-by-step guide to help you create a budget and create a clearer picture of your finances.
  • Keep your eye out for deals or offers on items you know you want to buy this Christmas, but don’t get drawn into buying things you didn’t need in the first place – a deal is only a deal if you were going to buy it anyway. Making a list in advance of your Christmas shopping may help you to stick to it and prevent you from buying extras you may not need.
  • Check out free Christmas events in your local area. It can be difficult to avoid the promotions and adverts for Christmas activities. But fun Christmas activities for you and your family or friends to enjoy don’t have to cost anything.
  • Shop second hand – are there items you want to buy that might be available second hand at just as good quality? Search online pre-loved retailers or in charity shops for your Christmas gifts or decorations this year.
  • Set budgets for friends and family gifts or use ‘Secret Santa’. We are all feeling the pressure of increased prices for essentials at the moment, so it may be helpful to discuss with your family and friends the best way to help those who may be struggling financially this Christmas.
  • Switch to cheaper supermarkets when buying your Christmas food. If you haven’t already, consider switching to a cheaper supermarket when buying food over the festive season. Try looking for websites that compare prices between different supermarkets.
  • Think carefully before you borrow money – try not to get drawn into short-term high cost credit, or options to buy now and pay later if it’s not affordable. If it’s going to take many months to repay what you borrow to pay for Christmas, it’s worth pausing for a moment to think about whether your friends and family would really want you to suffer financially as a result of your generosity.
  • Make the most of your Christmas leftovers. Following Christmas day if you’re left with lots of food, search online for good Christmas leftover recipes that you can batch cook and freeze that may reduce the need for you to go food shopping as much.
  • Travelling for Christmas? Book tickets in advance for the cheapest fares, and make the most of off-peak discounted travel, family travel or rail sales.
  • Consider starting to save for Christmas 2023 from January 2023 – this may be difficult with the current cost of living, but even putting aside a little money each month may make the burden of Christmas easier.
  • If you’re struggling with debt or money worries, reach out for help and support. Christmas can be a time of joy and celebration, but it can also put great pressure on us financially, particularly this year amid the cost of living crisis. If you’re worried about your finances or experiencing problem debt, a charity like StepChange can help with free and impartial debt advice.