Yuletide spending cutback for 2020 COVID Christmas

24 per cent of London households will cut back their spending significantly this Christmas (Photo: HOLLIE ADAMS/AFP via Getty Images)

It is set to be a strange Christmas this year in many ways with huge cutbacks in spending due to pressure from the COVID-19 pandemic.

New report

A new report by Leeds-based debt management company Lowell has revealed the impact Christmas will have this year on UK household finances and the UK regions looking to reduce their spending the most this festive season.

It shows that 24 per cent of London households will cut back their spending significantly.

Payday loans applications for Christmas are set to increase by 110 per cent while funding Christmas via disposable income is set to decrease by six per cent as households feel the financial strain.

As we fast approach the end of the year, many UK households are now turning their financial efforts towards affording a 2020 COVID Christmas.

Stressful time

The festive season can put stress on household finances at the best of times. However, it would appear that this year may be even more of a challenge as the UK continues to battle the global pandemic.

Christmas 2020 is set to look different from any Christmas we have faced before as the effects of coronavirus continue to grip our nation.

Urge to reduce spending!

With household finances impacted due to the economic damage of the pandemic the report by Lowell reveals that 30 per cent of households will feel financial pressure along with the areas set to reduce their spending the most this coming Christmas.

The 24 per cent reduction in spending at Christmas in London is followed by 23 per cent in Bristol and 20 per cent of households in Sheffield.

Which UK region will be hit hardest?

The below table highlights the percentage of households per region who are set to decrease spending significantly this Christmas ...

London 24.1 per cent

Bristol 22.7 per centSheffield 20 per centEdinburgh 19.2 per centNottingham 19 per centLeeds 16.2 per centBelfast 15.8 per centLiverpool 11.5 per centManchester 11.4 per centBirmingham 10.3 per centNorwich 10.3 per centNewcastle 8.9 per centCardiff 8.3 per centSouthampton 5 per centGlasgow 3.4 per cent

Words of advice

Lowell UK Managing Director John Pears said: “During these unprecedented and uncertain times we understand that many people are struggling.

“We want to take this opportunity to stress that people should not feel pressured into spending more than they can afford at this time of year. Our report shows that, worryingly, there is an increase of people intending to use payday loans or other methods of credit to fund Christmas. Sadly, this can lead to debt that can mount beyond control.”

He added “There are a number of organisations who can help you if you need independent, impartial advice – available at www.lowell.co.uk/help-and-support/independent-support website.

“We would advise anyone struggling with debt or worrying about money to reach out to one of these organisations for support.”

The report reveals that 60 per cent of households feel the pressure to overspend on presents while a staggering 64 per cent feel the pressure to overspend on food.

Funding Christmas in 2020

When asked how households funded Christmas 2019 and how this compares to Christmas 2020, Lowell say payday loans will increase by a staggering 110 per cent and loans to rise by 55 per cent while disposable income is set to decrease by six per cent. Some other results show that borrowing from friends or family will increase by 36 per cent and using credit cards will increase by 18 per cent.