IPA: Consumers balance festive spending and costs

Price-saving measures continue to play an important role in retailer selection

Almost half of UK consumers expect to feel financially anxious this Christmas because of rising living costs, but many still intend to maintain their festive spending. According to the IPA's 2026 Christmas Consumer Report, shoppers are increasingly relying on discounts, seasonal sales and credit to manage the cost of the festive period.

The report is based on a nationally representative survey of 2,000 UK adults conducted by Opinium between 19 and 22 May 2026. It examines consumer attitudes towards Christmas spending, shopping behaviour and payment methods.

Financial concerns remain widespread

The research found that 45 percent of consumers expect to feel more financially anxious this Christmas because of rising costs. Despite these concerns, 49 percent said they do not plan to cut back on any aspect of their festive spending, compared with 42 percent last year and 45 percent in 2024.

Almost half of respondents (47 percent) agreed that Christmas is a time to indulge, even if it means spending more than they should. Consumers expect to spend an average of £647 during the festive season, £84 more than when the question was first asked in 2024. Gifts account for 58 percent of the average Christmas budget, while food and groceries represent 22 percent.

Discounts influence shopping decisions

Price-saving measures continue to play an important role in retailer selection. Free delivery was the most important factor for 37 percent of respondents, followed by trusted retailers at 33 percent. Coupons or discounts (24 percent), price matching (20 percent) and free returns (20 percent) also ranked among the leading considerations.

The report also points to growing interest in seasonal sales. Twenty-two percent of consumers expect to spend up to half of their Christmas shopping budget during Black Friday, compared with 16 percent in 2025 and 14 percent in 2023. A further 27 percent plan to shop during the Boxing Day and January sales.

Credit use continues to increase

The findings indicate a growing reliance on credit to fund festive spending. Fifteen percent of consumers plan to use a credit card this Christmas, up from 13 percent in 2024. Buy Now, Pay Later services are expected to be used by 14 percent of respondents, compared with 9 percent two years ago.

The trend is more pronounced among younger consumers, with 20 percent of Generation Z and 22 percent of Millennials planning to use Buy Now, Pay Later services during the festive season.

Practical gifts gain popularity

The report also found that 44 percent of consumers hope to receive practical or essential gifts, with this preference particularly common among younger adults.

Sophie Dimond, Senior Insight Lead, IPA: "As the adage goes, Christmas is a time for giving. Sadly, an adage that doesn’t necessarily factor in a cost-of-living crisis… As we can see from the data, while the desire to spend on the festivities is high, the reality is that times are tough for many so there is a danger that Christmas spend could turn into New Year debt.

As such, brands should be mindful of the role they play here and the value they can bestow - on which note, it is interesting to see consumers are seeking out trusted brands – ie those that infer high quality and reliability, when it comes to the criteria they seek from a retailer."

www.ipa.co.uk

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