It’s beginning to look like an expensive Christmas: Families face £400 rise in festive bill this year as cost of living bites

DAILYMAIL.COM • 2h ago

By OLIVIA DAY, ASSISTANT NEWS EDITOR, AUSTRALIA 12:47 11 Oct 2026, updated 13:05 11 Oct 2026

Families face a £1,500 Christmas bill this year – and a third of Britons are prepared to take on debt to cover the festive splurge.

New research suggests the average household will spend £1,500 on festivities this year – £400 more than last Christmas – amid rising food, energy and housing costs.

Households are expected to spend £693.80 on presents, £185.80 on Christmas dinner and a further £158.20 on snacks, sweets and treats.

Once alcohol, low and no-alcohol drinks, decorations and festive activities are included, the total cost rises to £1,502.

Four out of five adults surveyed by Park, the UK’s biggest Christmas savings club, said they are worried about how they can afford a decent festive period this year.

Worryingly, more than a third (35 per cent) are planning to go into debt to pay for it.

Up to 23 per cent are planning to use a credit card, nine per cent will use their overdraft or take out a loan, and three per cent will borrow from friends or family.

Only 22 per cent say they have saved throughout the year for Christmas.

Despite financial pressures, younger adults still plan to celebrate in style.

Gen Z households expect to spend an average of £2,274, more than two-and-a-half times the £870 planned by Baby Boomers – a difference of £1,404.

But younger adults are also far more anxious about how they will pay for it.

Four in five Gen Z respondents (80 per cent) said they were at least fairly worried about affording Christmas, compared with 68 per cent of Millennials, 59 per cent of Generation X and just 37 per cent of Boomers.

Overall, 59 per cent of respondents expressed concerns about affording Christmas, including 35 per cent who said they were very or extremely worried.

By contrast, 41 per cent of Boomers said they were not worried at all, compared with only 15 per cent of Gen Z.

Presents remain by far the biggest festive expense, accounting for an average of £693.80 per household.

Gen Z expect to spend £851.50 on gifts, almost £400 more than the £465.70 planned by Boomers. Millennials are budgeting £799.10, and Generation X £687.50.

The average anticipated Christmas dinner bill is £185.80, rising to £285.20 among Gen Z – more than two-and-a-half times the £110.70 planned by Boomers.

Gen Z also expect to spend £275.20 on snacks, sweets and festive treats, more than three times the Boomer budget of £84.50.

And while younger adults are often associated with drinking less alcohol, their overall drinks budgets remain substantially higher.

Gen Z anticipate spending £268.80 on alcoholic drinks for the home, compared with £93.30 among Boomers.

Gen Z also plan to spend more than five times as much as Boomers on decorations – £129.50 compared with £25.20 – and almost four times as much on Christmas activities and days out, at £252.70 versus £64.20.

The looming festive squeeze, up 29 per cent since last year, comes as families continue to grapple with the cost-of-living crisis and everyday bills.

UK inflation stood at 3.1 per cent in August, while food prices were 1.3 per cent higher than a year earlier. Housing and household-service costs rose by 4.3 per cent, including a 3.9 per cent increase in owner-occupiers’ housing costs.⁠⁠

Energy bills have also increased just as households begin preparing for winter.

Ofgem raised its price cap by 4 per cent from October, taking the typical annual gas and electricity bill from £1,663 to £1,723. Gas bills rose by 8 per cent under the new cap.⁠⁠

Meanwhile, the Bank of England has held its base rate at 3.75 per cent and warned that mortgage rates and other borrowing costs have risen, leaving many households with less disposable income.⁠⁠

Simon Birch, Park Christmas Savings’ director of prepayment, said: ‘There is no doubt millions of people are expecting their Christmas spending to rocket this year and are very worried about it.

‘Families deserve to have a good time over the festive period but that always comes at a price. We would urge people to please not go into debt if they can possibly afford it. No one wants to start a new year with that hanging over their heads.

‘The best way to have the perfect Christmas without going in the red is to save a little each week or month. Park customers are able to put money aside and ring fence it, so they are less tempted to raid the piggy bank for other things during the year.’

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