Don't Let Christmas Drain Your Savings

Christmas is coming for your savings account. New research from bunq, released this week, found that 67% of UK adults have dipped into their savings to cover everyday living costs in the past year — and with 74% expecting to spend more than usual across November and December, the festive season is where thin financial cushions go to die. Nearly a quarter of savers (23%) admit they withdraw from savings to fund the season rather than add to it.

But PayPal research out this week found the calmest shoppers aren't the ones spending least — they're the ones with a clear payment plan. Here's how to fund the festive season without touching your savings.

The festive savings drain, by the numbers

The bunq survey of 1,000 UK adults shows a nation that sees itself as disciplined — 87% call themselves savers — while nearly a quarter save less than 5% of their income, 5% save nothing, and 28% feel embarrassed about how little they have set aside. Then the season hits:

• 43% expect to spend up to 25% more than usual in November and December; 21% expect 26–50% more.
• 42% save less or nothing at all over Black Friday and Christmas; 61% expect to buy more than usual.
• Last Christmas, 29% used part of their savings, 31% cut back significantly, and 16% overspent.

VoucherCodes forecasts Brits will spend a record near £94 billion on Christmas this year, with the average person spending £1,411 over six weeks from mid-November. Across the Atlantic, Bain & Company projects US holiday retail sales will pass $1 trillion for the first time in 2026. Your savings are in the season's path.

"The 'points pro' isn't cutting back on Christmas; they're outsmarting the cost of it: stacking loyalty points, vouchers, cashback and flexible payments to get the same festive season for less." — Dave Jones, head of UK consumer at PayPal

Why Christmas is so good at emptying your savings

The spending is stealthy: MoneySuperMarket found gifts — the one expense people actually plan for — are only ~15% of the total festive cost. The other 85% is food, travel, parties, decorations, wrapping and postage — weeks of small taps that never feel like decisions.

And savings feel like the natural shock absorber. As bunq's Joe Wilson put it, the figures show how difficult many people find it to balance celebration with financial security. The cost: every pound withdrawn from an emergency fund is a pound to rebuild later, usually in January, when bills are highest.

The smart-spender's festive playbook

1. Set one total festive number

Not a gift list — one number covering gifts, food, travel, hosting, decorations, postage and a buffer for the "little things." Averages range from £603 (PayPal) to £1,411 (VoucherCodes, six-week measure). Write yours down: 58% feel more in control with a clear payment plan.

2. Give Christmas its own pot

Move festive money into a separate account or savings pot as soon as November begins. Zopa's research found 68% of Brits believe different times of year call for different approaches to money — a dedicated pot both caps your spending and creates friction between you and your emergency savings.

3. Run the "points pro" stack

PayPal's survey spotted savvy shoppers who stack money-saving layers: 18% save loyalty points for festive purchases (avg £57.20 redeemed), 16% set aside gift vouchers, and the average Brit estimates saving £88.70 by combining deals, cashback, points and early shopping. Audit your accounts this weekend — free money hiding in plain sight.

4. Buy early and cap gifts per person

Nearly two-fifths of Brits start Christmas shopping in October. Martin Lewis noted this week that toy sales are already on at Argos and Asda, and buying early spreads the cash-flow hit so December's pay isn't doing all the work. Set a per-person gift limit first; a known £20 cap beats a vague "try not to overspend."

5. Protect January

January is when the damage shows up: winter utility bills, long pay gaps, depleted savings. If the festive pot runs dry, the season is over — not your savings.

How to fund Christmas: the options compared

Funding source	Upside	Downside	Verdict
Emergency savings	Instant, no interest	Erodes your safety net	Avoid
Income + a festive pot	Capped, visible, debt-free	Needs planning ahead	Best option
Loyalty points, vouchers, cashback	Free money; ~£88.70 saved on average	Takes effort to collect	Do it this weekend
Buy now, pay later	Spreads cost interest-free (in term)	Stacks up silently; missed payments hit fees and credit files	Planned purchases only
Credit card	Flexible; extra protection on larger buys	High APRs; £600 of Christmas can run to summer	Only if cleared in January

Frequently asked questions

Is it ever OK to dip into savings for Christmas?

A dedicated festive sinking fund — money set aside specifically for Christmas — is exactly what it's for; spending it is the plan working. Your emergency fund is not: withdrawing for gifts turns a seasonal expense into a hole in your safety net.

How much should I budget?

Averages suggest £600–£1,400 in the UK, but use your own cash flow: add up last December and January's bank statements, add 10–15% for price rises, and that's your honest number.

I've left it late — it's already November. What now?

Divide your total festive number by the paychecks left before Christmas and move that amount into a separate pot each payday. Cut the list before you cut the savings — fewer, thoughtful gifts beat a full trolley funded from your emergency fund.

What actually counts as festive spending?

Everything the season adds: gifts, extra groceries, travel, hosting, parties, decorations, cards and postage, wrapping, children's events, work collections. Gifts are only ~15% of the total — the other 85% is what ambushes savings.

Your next step

This weekend, open a separate savings pot and name it "Christmas." Move in a starting amount and pull together your loyalty points, vouchers and gift cards in one place. One pot, one plan — and your real savings stay exactly where they are. January-you will thank October-you.