Three-quarters of consumers to cut Christmas spending due to cost-of-living crisis

More than eight in 10 consumers are planning on further cutting non-discretionary spend this year, with 77% of respondents focusing on shrinking their Christmas spending compared with normal, according to the latest Retail Economics-HyperJar cost-of-living tracker.

Nearly 40% of respondents said they would cut their Christmas spending “a lot”, with energy prices set to increase again in October. 

This comes after the average household saw discretionary income decline 10.6% in May compared with the same month last year, leaving them with £127 less to spend on non-essential items.

The data suggests £3.5bn of cash was wiped out for discretionary purchases over the month.

The research shows the least affluent households are seeing inflation rates of 11.6% across their spending. After paying for all essentials, the least affluent saw their spare cash fall by 13.9% in May compared with the same month last year – a £68 decrease. 

More than nine in 10 are worried their personal finances will be impacted by further rises in energy prices in October.

On the back of this, 92% of UK households plan to reduce their energy consumption this autumn/winter, including heating their homes less. Around half (49.4%) of households plan to reduce their energy use “a lot”.

Mat Megens, chief executive of HyperJar, said: “The energy discount clearly hasn’t taken the chill off consumer confidence. This research shows that most of us have or plan to cut back on discretionary spending, right up to Christmas, and to significantly reduce our energy consumption this winter.

“Typically, big financial shocks prompt a move from shorter to longer-term money habits. We’re starting to think ahead, to plan for future pressure points like winter fuel and Christmas costs, and adapt our finances to meet them as best we can.”