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Bassatt Hound with a Christmas hat on looking mournfulFifty percent of people used credit cards, overdrafts, store cards or payday loans to cover Christmas spending this year and over a third raided their savings, according to a newly published survey by Which magazine.

With food and energy costs continuing to rise and with most people’s wages curbed, the survey into Christmas spending found people aren’t feeling positive about the New Year either, with more than half of people expecting their household budgets to be even tighter in 2013.

Key findings of the new Which? poll include:

  • 22% of people said they could only afford to pay for Christmas by using credit cards and overdrafts with the average borrowing being £300
  • 18% of people raided  their savings, taking out an average of £400
  • 12% of people borrowed money from friends or family
  • 56% of people spent less on Christmas this year than last year
  • 48% of people didn’t buy as much food this year
  • 61% of people felt this Christmas was financially tougher than last year
  • 92% of people felt under pressure to spend too much at Christmas.

Chancellor George Osborne is hoping that the UK’s escape from its current financial woes will be largely led by a consumer spending-led economic recovery. Unfortunately for Mr Osborne, the survey’s findings that millions of people have drastically cut back on Christmas spending or taken out loans to cover Christmas costs shows just how squeezed household budgets are right now. It also shows how far we are from the hope that consumer spending will be the country’s saviour.

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