Christmas is always an expensive time of year but with millions of households facing crippling cost increases many are likely to find this year especially difficult. The UK is seeing rising costs across the board with the consumer prices index (CPI) rising by 11.1% in the 12 months to October – a 40-year high – and energy costs 95% higher than last winter.
The Bank of England has raised interest rates in a bid to tackle inflation and warned the UK faces a two-year recession – the longest since official records began. It has forced governments to roll out cost of living packages to support those hardest hit by the crisis including £650 for those on means-tested benefits, £400 off energy bills for all households, and £150 for those with disabilities. More cost of living support has already been announced for next year by chancellor Jeremy Hunt in his recent autumn statement.
With so much pressure on finances many might be daunted at the idea of Christmas presents, food spending, festive parties, and the other expenses that come around this time of year. So we've put together a list of ways you can do Christmas more cheaply this year according to MoneySavingExpert founder Martin Lewis. Below are a list of tips taken from the MoneySavingExpert website and Mr Lewis' weekly email as well as advice given on The Martin Lewis Money Show on ITV. To get all the latest money-saving news straight to your inbox twice a week sign up here.
Plan your spending
Arguably the most valuable thing you can do this year is not spend beyond your means by trying to create the 'perfect' Christmas for your family. Responding to a consumer on The Martin Lewis Money Show on ITV recently Mr Lewis said: "One of the things I always say that people do wrong at the festive time is they create a lust list. They have a perfect Christmas pictured in your mind of everything you want, exactly how it's going to be. And then you try and work out how you can do it. Please don't do that. That's likely to lead to debt or disappointment in your circumstance."
Instead Mr Lewis' advice is for you to work out exactly how much money you have to spend over Christmas, work out what the best Christmas you can have on that amount of money is, and only spend that amount. "If that's going to be a struggle Christmas is one day," he stressed. "We don't want you to get in debt in the new year. See friends and family, talk to people, eat, watch the telly, and have a good time. I think sharing time is more important. Cut your cloth accordingly and go cold turkey if you can't afford it. We are in a cost of living crisis. Christmas is one day – do not ruin your lives for Christmas."
Mr Lewis' words mirror his sentiments expressed on a past show back in 2018 and shared again in this year's Christmas special edition of The Martin Lewis Show when he asked people to "work together" to stop tit-for-tat spending. He said at the time: "Christmas should be joyous but it causes some people unhappiness, debt, and worry. Many people feel obliged to buy gifts for others that they know they won't use with money they don't have and causes them stress they don't need."
Mr Lewis described Christmas as a "zero-sum game". He said: "I give to you, you feel obliged to give back to me at a similar value. To fulfil that obligation we do tit-for-tat giving." But while he said he understood the "gift of giving" Mr Lewis said this could actually be "selfish" and can "mis-prioritise people's finances and create a financial burden". He added: "It is time for us to get off this gift-giving treadmill. I think sometimes the best gift is releasing others from the obligation of having to give to you. Let's work together to ban the giving of unnecessary Christmas presents. Not for your spouse, not for smiling children under the tree, but that ever-expanding list of friends and cousins and teachers [for whom] we feel forced to buy."
Take steps to reduce energy bills
Following a series of increases this year due to wholesale market prices gas and electricity costs are currently around 95% higher than they were last winter. Many are struggling to afford bills and are worried about future increases with the coldest months yet to come – especially when it comes to keeping family and friends warm over Christmas.
MoneySavingExpert has urged households to look at little things you can do to save some money on energy this festive season. For example British Gas says dropping the temperature by one degree could save £115 a year on average for a typical home. This is a considerable saving for what is only a slight adjustment to your heating settings. If you have a combi boiler (the most common type – one without a hot water cylinder) a key way to save is to reduce the flow temperature which is usually set higher than needed by default meaning it doesn't operate in its most efficient mode. Innovation charity Nesta has launched a money-saving boiler challenge with a tool on how to do it which it says could cut gas bills by an average 9% (£112 a year).
You can do similar with the water temperature in your boiler which is often also set to higher than needed. Octopus Energy says a temperature of about 55°C should be enough for most so if you are diluting the hot water with a lot of cold to reach the desired temperature in your bath it is likely too hot and you're wasting money. Combi boilers usually have an option to change the temperature which is often indicated by a little tap icon.
There are a number of other ways to save including:
- Buying a cylinder jacket for your hot water cylinder to insulate it (these are usually about £15)
- Turning off the radiators in rooms you aren't using
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Bleeding your radiators regularly to prevent air being trapped inside
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Checking the pressure gauge on your boiler (anywhere between 1.0 and 2.0 bar is ideal on most)
You can find more energy saving tips including how to find out how much energy each appliance in your house uses here.
Book your Christmas delivery slots as soon as you can
We all know it – the mad scramble to grab a festive delivery slot timed just well enough to give you the freshest veg, pigs in blankets, or turkey while also allowing enough time in advance of the big day to prepare it all. Pre-planning is key here – most major supermarkets have opened their slots for Christmas along with dates for when they will be delivered.
Many supermarkets allow you to change your order after booking so it's a good idea to check if you can do this as it could help you save on money and food waste if there are items you no longer need after ordering. It's also worth remembering that some brands ask for a minimum spend to deliver and that there are delivery fees too so you should consider whether you need a delivery or if shopping in person or doing a click and collect would be better for your finances. Booking slots tend to go quite fast so it's worth booking yours now in order to save on stress if nothing else. You can check which supermarkets have opened up their slots and when deliveries will arrive here.
Act early on Christmas travel
For many of us Christmas means travelling to see family who might live in different parts of the UK or even further afield. According to MoneySavingExpert you should be booking train tickets in the UK about 12 weeks in advance to get the best deals. Most train firms have now released tickets for pre-Christmas travel and booking advance tickets rather than leaving it until weeks or days before you travel is likely to benefit your wallet. This also counts for return trips after Christmas – many companies are allowing you to book advance fares up to January or February so it's worth booking now if you already know when you are going to travel back after your Christmas trip. Find out more about train prices over Christmas here.
Decorate on a budget
If you're looking for a cost-effective way to decorate your home for Christmas it's also worth noting shops that offer cheap ways to do it. According to MoneySavingExpert from Friday, November 25, if you buy a £25 real Christmas tree from your nearest Ikea you'll be given a £10 voucher to spend in store between Monday, January 9, and Sunday, February 12, so it’s effectively a £15 tree as long as you’d have spent £10 in the New Year anyway. Officially the offer lasts until Saturday, December 24, but in previous years the trees have sold out before this so you will probably need to be quicker.
Other shops are likely to have discounts on decorations in the weeks leading up to Christmas – more on that below – so that might also be worth considering if you don't mind decorating the house until a little closer to Christmas Day.
Know your rights
Navigating busy shops can be stressful when it comes to Christmas shopping but it's important to know your consumer rights to make sure you don't waste money. By law you only have a right to change goods bought in stores if they are faulty – this is down to the goodwill of the shop but not automatic. Sometimes shops have their own return policy but it's worth checking this in advance as even those policies may not apply to sale items.
The story is slightly different when it comes to online shopping where you have a legal right to return within 14 days without reason and 14 days to send an item back. This is the law and any outlets suggesting otherwise are incorrect though there are some exemptions such as personalised or perishable items.
Another important aspect to this is gift receipts. As Mr Lewis outlined on his show recently legally only the purchaser has the right to return a product and not the person who it is gifted to. This means a shop can say no if the person who receives the gift tries to return it (but often they don't). A gift receipt transfers this right to the person who receives the gift so it's always best to ask for one if you can. If not you can write down on a normal receipt that the item is a gift, which should guarantee you the same rights if the person wants to take it back.
Online shopping hacks
It should go without saying but making sure you're shopping around is key when it comes to keeping your spending down around Christmas time. A number of helpful websites cited by Mr Lewis include PriceSpy.co.uk for good comparisons on products in different shops, CamelCamelCamel which shows Amazon price changes over time, SuperSaverDeliveryTool.com which finds an item with the exact value needed to give you free Amazon delivery, and LoveSales.com which gives you alerts when prices drop on a particular item.
Did you know you can also haggle with online shops? To do this Mr Lewis advises you to go to the store's online chatbots and ask for discount. It sometimes does work. Another tactic which is sometimes successful is putting an item into your basket online and then waiting a couple of days. In some cases the store will contact you offering a discount.
Watch out for 'last order' dates
Another thing to watch out for is the deadline for postal and online Christmas deliveries. Most retailers have two separate cut-off dates – one for cheapest standard delivery and another for faster 'express' delivery that usually costs more. With Royal Mail strikes likely to affect deliveries this year it's more important than ever to make sure you order as far in advance as you can in order to avoid paying higher rates to ensure your delivery arrives when you need it. Many retailers have yet to announce their dates yet but they are often several days prior to Christmas Day.
Earn cashback when you spend
If you're going to be spending money over Christmas Mr Lewis says you should at least try to get some free cash for it. On his recent Martin Lewis Money Show he cited two examples offering cashback. The Chase debit card gives one year 1% cashback on almost all spending and you don't need to switch bank do avail of it. You can also use it alongside other free cash accounts such as those mentioned above. There is no credit check with this – only an ID check.
The American Express Platinum Cashback Everyday gives 5% cashback for the first three months up to a maximum of £100. This is good for big purchases but you need to spend at least £3,000 a year to get that cashback. After three months tiered rates of up to 1% come in but as this is a credit card you need to set up a direct debit to pay back in full or you will pay nearly 27% APR afterwards. Mr Lewis says you should also check cashback sites such as Quidco, Topcashback, and the Airtime Rewards app for cashback offers.
Keep an eye out for Christmas deals
While you shouldn't be spending unnecessarily if there are things you want to buy it's worth noting that many brands have sales around Christmas time. MoneySavingExpert has a Christmas deals predictor which forecasts when some companies might put on sales based on past years. For example Royal Mail will be giving you the chance to send a letter to Santa and get a response for free (many companies charge for a response) during the week of December 5-11. Marks & Spencer has traditionally offered 30% off Christmas decorations in past years around this same time so that could happen too. Other deals likely to happen during December are half price off Boots No 7 products, 14p cheap vegetables in supermarkets, January sales on British Airways flights, and Virgin Atlantic winter sales. You can keep up to date with the latest Christmas deals including what is predicted or confirmed for 2022 here.
Get paid to switch bank accounts
If you're looking for a way to get some free cash over Christmas (or any time of year really) there are a number of great deals giving you free money just for switching bank accounts. The most generous are Nationwide and HSBC. Nationwide's FlexDirect gives you a free £200 with 5% interest up to £1,500 for a year and a 0% overdraft. It pays within 10 days after switching if you meet criteria but there is a minimum pay-in of £1,000 a month. HSBC gives you a free £200, linked 3% interest on up to £10,000, with a pay in of £1,500 (which you can take out again). Another good offer is First Direct which offers a free £175 and a £250 0% overdraft for many. There is a monthly pay-in requirement of £1,000.
To avail of free cash deals you must switch using the bank's official switching service and pass a credit check. If you're successful the bank will close your existing account and shift your direct debits and standing orders. Switching banks comes with a slight caveat – Mr Lewis has said that multiple switches can impact your credit score so if you're applying for a mortgage it might not be something you should do imminently.
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