New data and consumer research from the Post Office released today (26 October) has revealed over half (54%) of households started saving for Christmas earlier than ever this year, as rising costs continue to put pressure on spending.
This trend is reflected in Post Office’s quarterly Cash Tracker data (covering July-September), showing high levels of personal cash deposit transactions at branches, rising by 7% year-on-year to over 17m.
This figure is up by 3% on the previous quarter, with the value also increasing by 5% this quarter, suggesting more people are putting money aside during the later summer months to prepare for winter costs.
Harder to afford
Close to half of UK adults (43%) who celebrate or spend over the festive season expect this year to be harder to afford than last.
Around one in three adults (38%) started to think about how they would fund the festive season during summer, while 31% said they typically start saving during this period.
With household budgets under increasing pressure, nearly half (48%) of people currently putting money aside say rising living costs are prompting them to save earlier this year.
Cash is key
Cash is also playing a key role in planning, with 63% using it to budget or keep money aside for specific expenses, while 31% say cost pressures have led them to use cash more to manage finances.
Ben Hunter Woollard, head of banking at Post Office, said: “As households brace for a more expensive festive season, Post Office branches have handled a high number of personal cash deposits this summer. For many people, using cash is a helpful way to plan ahead, budget and put money aside for specific costs.
“These findings underline how important cash remains and at Post Office, we are committed to keeping cash accessible on local high streets, making sure customers can securely pay in or withdraw money into their bank accounts locally, whenever they need to.”
Smaller amounts Speaking on the new data, Ying Shi, Postmaster at Caterham Post Office, added: “Many of my customers regularly come in to deposit small amounts of cash, sometimes just £20 or £30 at a time. It might not seem like a lot, but those regular deposits soon add up and help people prepare for costs they know are coming.
“Over the summer, I noticed more customers putting money aside for occasions later in the year, particularly Christmas. Some are saving for gifts for children and grandchildren, while others are setting money aside for celebrations, family gatherings or household expenses.
“With the cost of living continuing to concern many households, some customers are using cash deposits to build a savings pot for unexpected costs. It’s a practical way to budget and one of the reasons our cash banking services remain so valuable to customers.”
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