Just one in 10 people are planning to spend more this Christmas than they did last year despite the average weekly disposable income rising to £193.
UK families have an extra £17 a week to spend, according to the Asda Income Tracker. The average discretionary income rose 9.6% to £193 in October compared to £176 a year ago.
Despite this 68% of consumers said they were planning to spend the same amount on Christmas this year as they did in 2014, while 21% said they would spend less.
Just 11% will splash out more during the festive period. Of those, 40% said they would buy better presents, while 38% expected to spend it on more indulgent food and drink.
Lower grocery prices
The tracker added that a fifth of consumers said they would spend between £300 and £500 on seasonal celebrations this year and the 2.7% fall in food and drink prices compared to October 2014 would help shoppers leave supermarkets with fuller baskets.
Asda boss Andy Clarke said: “Christmas is a time of year when budgets are under the most scrutiny, which is why I’m pleased to see another strong rise in discretionary income and an easing of pressure on family finances.
“Any extra money on the family account balance sheet is being saved and three quarters of people are planning to spend the same or less than they did last Christmas
“But what I’m hearing from my customers is a different story: discretionary income is on the rise but spending habits have changed – any extra money on the family account balance sheet is being saved and three quarters of people are planning to spend the same or less than they did last Christmas.”
CEBR economist Sam Alderson said: “Consumer confidence remains elevated, supported by factors such as rising incomes and improved job security.
“However, while the strong growth in spending power over the past year has considerably eased some pressures, many households remain cautious about the overall state of their finances and will be careful not to overextend themselves this Christmas.”