More than half of Brits plan to cut back on Christmas spending amid cost of living crisis

The cost of living crisis will have a significant impact on Brits this Christmas, with more than half admitting they are planning to cut back on spending.

Households are continuing to have their budgets squeezed by rising energy bills, soaring grocery prices and mortgage increases amid high inflation.

A new Ipsos poll has now revealed that 57% of people are expecting to spend less this year at Christmas compared to normal.

Among the things they will spend less on include presents (78%), decorations and festive lights (54%), Christmas parties and trips (48%) and food and drink (44%).

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It comes amid growing concern over the state of the economy.

The research was conducted before (7-15 September) the recent mini-budget from chancellor Kwasi Kwarteng which saw the pound slump to a record low against the dollar and the Bank of England (BoE) step in to prevent the collapse of the pensions industry.

The budget included sweeping tax cuts for big earners and vast increases in government borrowing, which spooked the financial markets.

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On Monday, prime minister Liz Truss and Kwarteng made a drastic U-turn in the face of widespread criticism from the public and Tory MPs and axed their plans to abolish the top rate of income tax.

The latest Ipsos Political Monitor showed strong public concern about the economy, with 71% expecting it to worsen in the next 12 months.

Millions of UK homeowners are facing steep increases in their mortgage payments as the BoE prepares to hike interest rates to curb spiralling inflation and stem economic turmoil.

Experts have sounded the alarm over a housing market crash amid fears unaffordable payments will cause a mass sell-off.

There’s also a question over whether benefits will be increased in line with inflation and prevent a real-term cut for claimants.

On Tuesday, ministers Robert Buckland and Penny Mordaunt said it “makes sense” to increase benefits in line with soaring inflation rather than deliver a real-terms cut.

Mordaunt joined backbench rebels in calling for welfare payments to be raised in line with inflation, which has been at around 10%, rather than earnings at 5%.

Truss is considering a rise in line with the far lower earnings figure.

While the average annual household energy bill rose from £1,971 to £2,500 from 1 October under the government’s recently announced energy price guarantee.