People spending less but borrowing more this Christmas

Almost 30% of people will be borrowing money to help them get through Christmas this year.

A new report shows that while most people expect to spend less this Christmas, the number who will have to borrow to afford it is on the rise.

According to the Competition and Consumer Protection Commission (CCPC), Irish shoppers expect to spend €1,030 this year, down from €1,186 in 2022.

Almost half expect to spend at least €1,000. The figure includes spending on gifts, food, clothing, drink and decorations.

Those aged 35-54 will spend the most while those under the age of 25 expect to spend around €670. 14% of respondents said they plan to spend in excess of €2,000.

Households with children reported the sharpest drop in Christmas spending, down an average of €221 on last year.

Those with children anticipate the festive period will cost them around €1,370 compared to those without children who will spend an average of €900.

The rising cost of goods and services is the main reason some people think this Christmas will cost them more than it did in 2022.

Others are opting to splurge more this year to make it an "extra special" Christmas or because they have gotten a raise.

Over 70% of people said they will be using their savings to fund their Christmas expenses while 29% plan on borrowing money.

Respondents said they were more likely to borrow from a family member or friend ahead of taking out a loan from a bank or credit union.

CCPC director of communications, Grainne Griffin, is encouraging people to think before they borrow.

"Don't ruin your January in search of the perfect Christmas - know the full cost of credit before you buy, and only borrow what you will be able to repay," she said.

The pressure to spend in order to provide a 'perfect Christmas' for loved ones can be hard to navigate for those who may not have money to spare and many will turn to borrowing or credit.

Ms Griffin said that people should avoid making snap decisions around borrowing.

The option of Buy Now Pay Later credit is something that has become more common in recent years.

Billed as a hassle-free, convenient option for consumers, respondents said the ability to defer worrying about payments until after Christmas is a large part of the appeal for them.

This Christmas, respondents intending to use the pay later option said they will be doing so mostly when buying electronics, clothes and toys.

The survey, released today, revealed that more than half of consumers are unaware of their rights when it comes to returning items.

"Your rights are independent of any warranty or guarantee - and they generally last much longer," said Ms Griffin.

"If something is faulty or not as advertised, your rights to a repair, replacement or refund are strongest in the first year after you get it, but they don't just go away once that year is over."

People are urged to read up on their consumer rights.