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One-third will raid savings to pay for Christmas

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Written by:
07/11/2012
Research from Moneysupermarket has revealed that 10% of us plan to use specifically-designated savings accounts to finance Christmas.

A further 24% will dip into their general savings accounts to meet the added expense of the festive season.

Only 38% of people say they can afford to pay for Christmas out of their disposable income.

One in 10 will put their yuletide spends on a credit or store card, while 3% plan to go into overdraft.

Kevin Mountford, head of banking at MoneySupermarket commented:

“With December creeping around the corner, many people may be dreading meeting the cost of Christmas presents and all the trimmings. We’ve experienced a costly year including price hikes on SVR’s for many mortgage borrowers combined with the recent energy price rises. It comes as no surprise that a quarter of those polled plan to break into their personal savings pot to get through the Christmas season. Yuletide can be an expensive time and it’s easy to get swept up in the festivities and spirit of spending. There’s still plenty of time ahead to make a budget and stick to it, to avoid spending more than planned.

“For those who haven’t done so already, it’s not too late to start saving for Christmas this year- just setting aside twenty pounds each week over the next few weeks could save you from skating on thin financial ice and help prevent sole reliance on your December salary to pay for everything. Savers should check the rate on savings accounts and look to switch to the most competitive deal in order to fuel savings returns. Chelsea Building Society currently offers the market leading savings account, its e-Saver Reward pays 2.60%.

“Those using plastic to cover the cost of Christmas could look at using a cashback credit card to earn money on spending- the cashback gained from spending throughout the year could be put towards next Christmas’ funds and is a much better alternative to high interest rate store cards as they offer a more competitive interest rate and still reward for spending. The American Express Platinum Cashback Card for example offers 5% cashback on your first £2,500 spend within the first three months. You will then earn 1.25% cashback on all other spend. Alternatively, a zero per cent interest on purchases card such as the Tesco Clubcard Credit Card offering 16 months interest free on purchases could be another way to manage your costs, providing you spend within your means and pay off the balance as soon as possible.”

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