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

With household finances impacted due to the economic damage of the pandemic the report by Lowell¹ reveals that 30% of households will feel financial pressure this Christmas along with the areas set to reduce their spending the most this coming Christmas.

24% of households in London are set to reduce their spending significantly this Christmas followed by 23% of Bristol and 20% of households in Sheffield.

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

How will people fund Christmas 2020

Payday loans, borrowing from family/friends, loans and pre-purchase Christmas schemes are set to see dramatic increases in demand this year as households struggle to cover the costs of Christmas.

The increase in these funding options is driven largely by the pressures households face to overspend.

The report reveals that 60% of households feel the pressure to overspend on presents whilst a staggering 64% feel the pressure to overspend on food.

When asked how households funded Christmas 2019 and how this compares to Christmas 2020, we see that payday loans will increase by a staggering 110%, loans to increase by 55%, whilst disposable income is set to decrease by 6%.

Full results can be seen below:

 John Pears, UK Managing Director at Lowell 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.