The research found that 45% of respondents expected to feel more financially anxious than usual due to rising costs this Christmas.

However, despite these concerns, 49% said that they would not cut back at Christmas this year, up from 42% the previous year.

In addition, 47% said that they agreed that Christmas is a time to indulge, even if this meant spending more than they should.

Consumers said they expected to spend an average of £647 on Christmas, £84 more than when the question was first asked in 2024.

Gifting accounted for 58% of the average Christmas budget, the IPA said, while food and groceries was at 22%.

Four of the top five factors that attracted people to retailers revolved around savings, including free delivery ( 37%), coupons and discounts ( 24%), price match ( 20%) and free returns ( 20%). Being a trusted retailer scored 33%.

In addition, 22% said they would look to spend up to half of their Christmas shopping budget during Black Friday, up from 16% in 2025.

A further 27% wanted to take advantage of the Boxing Day and January sales, the IPA said.

Fifteen per cent of consumers planned to use credit cards to fund Christmas spending, while 14% planned to use buy now, pay later schemes, rising to 20% of Gen Z and 22% of Millennials.

The research said that 44% of people wanted practical gifts this year, with the trend particularly prominent among younger generations.

The findings are based on a nationally representative survey of 2,000 UK adults carried out by Opinium between 19^th and 22^nd May.

Sophie Dimond, senior insight lead at the IPA, said: “As the adage goes, Christmas is a time for giving. Sadly, an adage that doesn’t necessarily factor in a cost-of-living crisis.

“As we can see from the data, while the desire to spend on the festivities is high, the reality is that times are tough for many so there is a danger that Christmas spend could turn into New Year debt.”