Two in three savers said they will spend less on non-essentials this year, with money going towards energy bills and everyday items.
Of those cutting back this Christmas, 42 per cent said they would buy fewer presents, while 27 per cent said they would spend Christmas at home.
For one in 10, they said they won’t host a Christmas party this year.
By cutting back on these areas, Paragon Bank’s research revealed nearly half (47 per cent) are planning to put the money towards their energy bills, while an equal number said it will cover their everyday spending.
For a third (30 per cent), they wanted to beef up their savings buffer, while for 13 per cent, they said they wanted to help family and friends.
Have yourself a low-key Christmas
With inflation now having reached 11.1 per cent in October – a 40-year high – and mortgage borrowers looking to tighten their belts, it appears Christmas will be a low-key affair this year for many.
Derek Sprawling, Paragon’s savings director, said: “As Christmas approaches savers are facing the real challenge of deciding whether to spend money on celebrating, parties and presents, or prioritising bills.
“Whilst not the cheeriest outlook, a high proportion of people are opting for the latter and putting money aside in anticipation of higher outgoings over the winter months. Hopefully, the peace of mind provided by having those rainy day funds makes Christmas more enjoyable.”
He added: “The good news for those setting money aside is that savings rates have been increasing in recent months and now offer the best returns for over a decade. Challenger banks can provide savers with more attractive rates on their savings pots which can grow and provide families with extra financial support to help pay for those extras that make Christmas worth working for next year.”
