One in three households with children will struggle to afford a family Christmas this year, according to a new report.
The YouGov poll of more than 2,000 adults also found that an estimated 8% of the population – around four million people – will be relying on credit to cover their costs over the festive period.
Debt charity StepChange, which commissioned the survey, said it came after “two years of cost of living pressures” on household budgets, with prices remaining high despite the recent easing in the rate of inflation.
The British Retail Consortium (BRC) has also issued a renewed warning that the pace of shop price rises could even start going back up again in 2024, as businesses face a number of additional headwinds in the new year.
StepChange chief executive Vikki Brownridge said: “People, especially those with children, understandably feel pressured around Christmas time to spend money to create special moments and memories with their loved ones.
“However this pressure can often encourage people to spend more than they can afford, and turn to credit to cover these costs.
“Against a backdrop of almost two years of high inflation, it’s very likely that relying too heavily on credit at Christmas could lead to debt problems in the New Year.”
She added: “At StepChange, we see some of our busiest days during January each year, with last January being our busiest month for several years.”
The poll found that overall around one in four people fear they will struggle to afford extra expenses this festive season. Some 2% of respondents – the equivalent of around one million people – said they would not celebrate Christmas at all due to the cost.
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Meanwhile separate figures from the BRC and NielsenIQ published today show that food price inflation eased again to 7.8% in November, down from 8.8% in October.
The overall rate of shop price inflation also fell to 4.3% in the 12 months to November, down from 5.2% in October.
However it comes after the BRC last week expressed fears about the new year as it warned that the government’s autumn statement was a “sell out” that had let businesses down.
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Bank of England governor: ‘Inflation is still too high’
The retail industry body’s chief executive Helen Dickinson reiterated those concerns on Tuesday as she insisted retailers were “committed to delivering an affordable Christmas for their customers”.
But she added: “They face new headwinds in 2024 – from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations.
“Combining these with the biggest rise to the National Living Wage on record will likely stall or even reverse progress made thus far on bringing down inflation, particularly in food.”