Spending power of families shrinking as Christmas approaches – study
Nine in 10 shoppers plan to spend the same or more on their children this Christmas, despite their shrinking spending budgets, Asda said.
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Your support makes all the difference.Families saw their “spending power” shrink by £35.57 per week in October compared with the same month a year earlier, according to an income tracker.
After paying tax and essential bills in October, the average household had £203 per week left – the lowest amount since August 2018 – the report from Asda found.
The index measures the amount of discretionary income UK households have left over to spend after essential bills such as groceries, energy, transport, mortgages or rent, and tax are subtracted.
The income tracker is produced by the Centre for Economics and Business Research (Cebr).
The under-30s saw the biggest annual fall in their spending power in October, while those aged 50 to 64 tended to be the most resilient – although all age groups saw their spending power shrink compared with October 2021.
Despite having shrinking budgets for spending, the supermarket also found that nine in 10 (92%) shoppers plan to spend the same or more on their children this Christmas.
A similar proportion (90%) intended to maintain or increase their spending on Christmas lunch.
More than half (54%) of adults intend to spend less on Christmas decorations this year. Some people also said they would cut back on spending for extended family members and friends compared with previous years.
The figures were released as a separate report from Nationwide Building Society and said that spending on essentials rose by 10% year-on-year in October, while spending on non-essentials increased by 6%.
The report analysed millions of debit card, credit card and direct debit transactions, made by Nationwide members in October.
Annual growth in non-essential spending is at its lowest level seen so far this year as people rein in spending on the things they want so they can afford the things they need
Nationwide said the increase in essential spending reflected the increased costs of bills and services such as energy, fuel, food and drink, mortgages, rent and debt repayments.
The Society said there was a 20% uplift in spending on gardening, but this is likely to be a result of people purchasing decorations and other Christmas items from garden centres and preparing their gardens for the winter months.
Mark Nalder, payments strategy director at Nationwide Building Society, said: “As expected, rising essential costs are putting increasing pressure on households, forcing them to divert even more income towards them.
“Annual growth in non-essential spending is at its lowest level seen so far this year as people rein in spending on the things they want so they can afford the things they need.
“With the festive season fast approaching, we expect consumers to look for discounts during Black Friday and Cyber Monday as a way of saving money in the run-up to Christmas before the nation starts to budget in the new year.”