More than six in ten (62%) parents believe a traditional Christmas is under threat due to the cost of living, with four in ten (40%) having to prioritise essential bills over festive spending, new research from Nationwide reveals.
The poll of over 1,000 parents, done in partnership with charity Action for Children, also reveals that 42 per cent say Christmas negatively affects their mental health due to financial stress, rising to 54 per cent among households earning £15k and under.
Action for Children forms part of Nationwide’s Fairer Futures social impact strategy. Britain’s biggest building society is supporting the charity’s ‘Secret Santa’ campaign, helping vulnerable children across the UK feel the magic of Christmas. By becoming a Secret Santa and donating to Action for Children, you could give the essentials of warm clothes, a hot meal, or a Christmas present for a child who wouldn’t otherwise get one.
Despite the squeeze, households still plan to spend an average of £673 on Christmas including gifts, food and travel. But when looking at different household income levels, there is a clear divide. Parents with an income of £15,000 or less expect to spend an average of £350, with 17 per cent of them keeping costs at £100 or below. By contrast, households earning over £75,000 plan to spend £1,086 on average, with 16 per cent spending between £1,751-£2,000.
For many families, borrowing could be the only option to cover Christmas expenditure, as more than one in ten (12%) parents say they will go into debt, rising to 16 per cent of those with a household income of £15,000 or less. Among those that will go into debt over Christmas, 53 per cent will rely on using a credit card, 35 per cent will turn to ‘Buy Now, Pay Later’ whilst 30 per cent will go into their overdraft.
To help cut costs, parents are making tough sacrifices to afford Christmas:
- 23% will cut eating out, with 20% ditching takeaways
- 16% will work extra hours; 14% will reduce their weekly food shop
- 10% say they’re already on the breadline with nothing left to cut
- 28% said they will “worry about the costs later”
Despite the pressure of festive spending, one thing remains constant - Christmas is still about family. Across all family groups surveyed, 66 per cent said family togetherness is the most important part of the season way ahead of food and drink (46%), gifts (42%) and decorating the home (34%).
Louise Fitt, 24 years old from London, said: “Christmas should be magical for every child. But growing up, I knew mine was different, cold rooms and no treats. I remember the silence of wanting but never asking, because I knew there was no money. Now, as a mum, I fight every day to give my five-year old daughter the childhood I never had. I shop for bargains, I stretch every penny, but the pressure is crushing. No parent should ever have to choose between keeping the heating on and giving their child a moment of joy at the time of year that should feel full of wonder.”
Charlotte Kensett, Director of Social Impact and Customer Experience for Nationwide, said: “It’s simply unacceptable that 4.5 million children in the UK are living in poverty. Through our partnership with Action for Children and its Secret Santa campaign, we’re working to ensure that those most in need have support not just for Christmas, but throughout the year ahead."
Support is available
- Between June 2024 and September 2025, Action for Children distributed over £800,000 in crisis grants to parents, children and young people in poverty. They are receiving an average of 300 applications a month for crisis help.
- Action for Children provide Family Clubs which are in up to 30 locations across the UK - they create welcoming and safe spaces where families can come to eat, get warm and feel comfortable, while also building supportive relationships with other families.
