Christmas on credit: one in seven ‘using buy now pay later to fund festivities’

Around one in seven (14%) Christmas shoppers are expecting to use buy now, pay later schemes to help fund the festivities this year, a survey indicates.

A quarter (25%) of people will be using credit cards to help fund Christmas spending, according to the research for banking app thinkmoney.

Financial Christmas hangovers are expected to drag well into 2026, with only 22% of Christmas shoppers surveyed expecting to have cleared their festive bills by the end of December.

Some 7% of shoppers expect to borrowing from family and friends to help fund Christmas, with more than half (51%) of people saying they will use their regular income and 42% dipping into savings.

The research also found that 47% of people said they find buy now, pay later (BNPL) attractive as a way to spread the cost of Christmas, rising to 73% among 25 to 34-year-olds.

Banking and finance industry body UK Finance said last week that BNPL services, which allow shoppers to split payments without paying interest, saw notable growth last year, with one in four (25%) UK adults using them, up from 14% the year before.

Concerns have been raised about some BNPL borrowers potentially overstretching themselves financially and incurring charges for loans they cannot afford to pay back on time.

In July, the Financial Conduct Authority (FCA) launched a consultation into BNPL, proposing rules to give consumers more transparency over what this type of borrowing involves, to take effect when BNPL comes under the FCA’s remit next year.

The new oversight by the FCA would give BNPL borrowers key protections that already exist for other types of lending. Borrowers will also be able to complain to the Financial Ombudsman Service if something goes wrong, under its proposals.

The regulator’s consultation closed on September 26 and it is reviewing feedback, with final rules expected to be published in early 2026.

From May 2026, firms without relevant consumer credit permissions will be able to apply through the temporary permissions regime, two months ahead of regulation starting on July 15 2026.

The thinkmoney survey, carried out by Censuswide among 2,000 people in September, indicated that people in Scotland could face the biggest Christmas bills this year, with people there expecting to pay £1,019 on average – nearly double the £566 average bill expected by Christmas shoppers in the East Midlands.

Some people surveyed have already started budgeting, with 26% saying they have planned their Christmas budget by September or earlier.

Some are also planning to make cutbacks elsewhere in their spending, with 35% planning to spend less on nights out and 15% trying to cut back on heating and energy.

Vix Leyton, consumer expert at thinkmoney, said some people could risk “turning festive fun into a debt time bomb that will echo well into 2026”.

She added: “Before putting Christmas on credit, it’s worth weighing up exactly what’s important to you and what’s just noise.

“For the essentials, planning early is key to create the biggest run up and bag the best bargains, and remember that Christmas is about celebrating with the people you love, not how much you spend.”

She suggested making gift lists and budgets, agreeing a gifting “price cap” with friends and family, avoiding panic-buying by starting early and planning for big sales events such as Black Friday to save money.

Setting up online wish lists and price alerts and factoring in delivery times could also help keep budgets on track, she added.

Here are the average estimates given by people when asked to estimate how much they expect to spend on Christmas 2025 in total, including food, gifts, decorations, and travel, according to the Censuswide survey for thinkmoney:

Scotland, £1,019

Northern Ireland, £961

London, £947

North West, £880

North East, £765

West Midlands, £762

Yorkshire and the Humber, £733

South West, £715

East of England, £707

Wales, £690

South East, £633

East Midlands, £566