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Welsh Shoppers Prepare for a Frugal Christmas 2020

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A survey has revealed that shoppers plan to spend less money this Christmas, with seven in 10 shopping early due to the impact of the Coronavirus pandemic and lockdowns.

More than half (55 per cent) of respondents to the Credit Unions of Wales survey said that the pandemic had a negative impact on their finances.

Four in 10 people planned to spend less this Christmas compared to 2019 and more than a third (36 per cent) of respondents expected to keep their spending for gifts, food and all the trimmings below £500, compared to 27 per cent last year.

Christina Stoneman, manager of Dragonsavers Credit Union serving the RCT area said:

“There is definitely a sense that this is going to be a more frugal Christmas, for many of us, with a significant proportion of respondents saying the Covid-19 pandemic has hit their finances.

“Fewer people have saved specifically for Christmas this year compared to 2019, which again indicates many of us have struggled to put money aside after paying for essentials. However, the survey also revealed that more people will turn to their savings to help pay for Christmas, which could leave them with a reduced financial safety net in 2021.”

While more people this year said they had set a budget (56 per cent), a quarter said that Christmas spending would impact their ability to pay essential bills like rent or utilities. And while more people planned to access savings this year compared to last, three in four respondents planned to take some form of credit.

“The proportion of people relying on credit, whether a loan, credit card or overdraft, is high, but last year almost all respondents (97 per cent) planned to borrow to cover the cost of Christmas,” Christina added.

“It is concerning to see a rise in the proportion of people who say they will turn to high cost credit via payday and doorstep lenders, as this could store up problems for 2021.

“There is also some hidden borrowing in the survey, with one in 10 turning to family and friends to help with the cost of Christmas.”

Credit Unions of Wales recommend that if those using credit, at any time of year, compare interest rates, compare repayment amounts and the length of the borrowing to make sure it’s affordable and the best deal for your circumstances.

Business News Wales