Britons dip into savings to cover festive spending

Britons are drawing on savings to cover daily expenses as the festive spending period approaches, according to research by bunq. The survey found that 67% had used some of their savings for everyday living costs over the past year.

Polling of 1,000 UK adults also found that 74% expect to spend more in November and December than in a typical month. At the same time, 42% said they save less or nothing over Black Friday and Christmas, while 23% said they withdraw from savings to fund the season.

The figures point to a gap between how people view their finances and how much they are able to set aside. While 87% of respondents described themselves as savers, nearly a quarter said they usually save less than 5% of their income, and 5% said they save nothing at all.

Almost three in 10 (28%) said they felt embarrassed about how little they had saved. That pressure comes as households continue to face higher mortgage costs, energy bills and food prices.

Thin buffers

For many respondents, the main reason to save was to build a financial backstop. Some 24% said they were putting money aside for an emergency fund, ahead of retirement at 13% and protection against the rising cost of living at 12%. Travel and holidays followed at 11%.

The year-end shopping period appears to put that effort under extra strain. Compared with a normal month, 29% said they save less in November and December, while 12% said they save nothing at all during that period.

Among those who save less or not at all over the festive season, nearly a quarter said they draw from savings rather than add to them. Spending expectations also rise sharply, with 43% saying they expect to spend up to 25% more than usual and 21% expecting spending to rise by between 26% and 50%.

Consumers also expect to make more purchases during the period. The survey found that 61% expect to buy more than usual, with groceries and retail the areas most likely to see increased spending.

Last year's strain

Looking back at the previous festive season, respondents reported similar pressure on household budgets. Some 29% said they had used part of their savings, 31% said they had cut back significantly on spending, and 16% said they had spent more than planned.

The findings suggest many households are entering the final weeks of the year with little room for unexpected costs. With a sizeable share already relying on savings for basic living expenses, seasonal spending may deepen the squeeze on cash reserves rather than simply reduce monthly saving rates.

The data also highlights a disconnect between financial identity and financial resilience. A large majority still see themselves as savers, but for a notable minority, that label sits alongside very limited monthly saving or no saving at all.

That matters because small savings balances can be exhausted quickly when essentials become more expensive. Households that regularly dip into savings to pay for food, heating or housing have less protection against larger shocks and less flexibility when seasonal spending rises.

Digital banks and traditional lenders alike have sought to encourage customers to create separate pots for specific goals, including emergency funds and annual spending peaks. The bunq survey suggests that, despite those tools, many consumers remain unable to build a meaningful buffer before the most expensive shopping period of the year.

Joe Wilson, Chief Evangelist at bunq, said the figures showed how difficult many people find it to balance celebration with financial security. "Nobody should have to choose between a good Christmas and a safety net," he said.

"You build it across the rest of the year. You set the rule once and it keeps running: a little put aside with every payment, interest on top, all of it adding up while you're creating new memories with the people you love," Wilson added.