Unwrapping Financial Realities: What Christmas Ads (or lack of) Reveal About Consumer Needs
You'll have noticed that banks are absent from our Race to Christmas analysis this year. (Though I'd quite like to see Dominic West try to outrun a black horse.) It's not that financial services brands are playing Scrooge; it’s more likely that they are taking a strategic pause, choosing to ramp up their campaigns in January when we're all a bit more receptive to financial messaging. After all, who wants to think about personal finances when there's bubbles and brie to be had?
Meanwhile, other brands seem more intent on tugging at our heartstrings than the ones on our purses. They're leaning into the festive spirit, focusing on empathy and emotional connection. It's as if they've realised that in this challenging financial climate, what we really need is a warm hug rather than a hot deal. But what's really going on with people's finances during the festive season? And how are brands (both Financial Services and not) responding to these realities?
The Ghost of Christmas Past - The Lingering Impact of cost of living
While some of us are still debating whether Die Hard is truly a Christmas movie, there's a more serious conversation to be had. The cost-of-living crisis might not be making headlines like it used to, but its effects are still very much present in many households this festive season.
As of October 2024, nearly half (48%) of UK adults are classed as potentially financially vulnerable, according to the Financial Research Survey (FRS) which aligns with the Financial Conduct Authority’s definition. That's almost one in two people potentially at risk of financial hardship in the lead up to Christmas. This vulnerability spans across income levels - even 34% of people earning over £50,000 a year fall into this category1.
It's a stark reminder that financial challenges can affect people at various income levels, especially in times of economic uncertainty.
The main culprit? Low financial resilience - the ability (or rather, inability) to weather unexpected financial storms. Other factors contributing to financial vulnerability include negative life events, low financial capability, and health-related issues. For some, it's a combination of multiple factors - compounding the challenge of managing finances during an already expensive time of year. Our qualitative research, conducted through the Money Talks community2, provides a deeper insight into how this financial pressure is affecting people's approach to the festive season. Many participants reported having to adjust their holiday spending habits in light of the current economic climate.
This financial reality sets the stage for how consumers approach the festive season, and as we'll see, how brands are responding to these challenges in their festive campaigns.
"I think the inflation and price rises have influenced the changes in my approach to spending in general in recent years and not just the holiday season. For that reason, I do find it more challenging to stick to a budget for the holidays now compared to before where I did not have to worry as much perhaps.”
Consumer Spending Habits During the Holidays
Despite the financial difficulties many face, which can make them potentially vulnerable, spending during the holiday season typically increases significantly.
CHAPS data from 2023 shows spending during December was 40% higher than the monthly average for the year3. It seems that when it comes to Christmas, many are willing to stretch their budgets to create those magical moments.
It’s also true that consideration for financial products like loans and credit cards also peaks during the winter months, particularly in December. FRS data reveals that consideration is seasonal – with one in 10 people considering switching their loan provider or getting a new product entirely and 14% thinking the same about credit cards in December 2023.
Our Money Talks research reveals a diverse range of spending habits and strategies among consumers during the holiday season. Many people are planning their Christmas spending meticulously, often starting months in advance. They're setting budgets, spreading costs over time, and prioritizing essentials like food and experiences.
Parents, especially those with younger children, tend to be among the most careful planners. They're driven by a desire to create special moments for their kids while balancing financial realities. This often involves a delicate juggling act between meeting children's expectations and staying within budget limits.
"I tend to start buying presents in November. I don't have a lot of people to buy for by any means, but I do tend to spend quite a lot on my daughters! So, I budget it quite early on and I do also have to dip into savings to buy everything I need and repay my savings in the new year, so I am not out of pocket."
The Most Wonderful Time Of The Year? - Coping Strategies and the January Awakening
Some consumers are getting creative with alternative income streams to fund their festivities. This includes selling unused items online, maximizing cashback offers, and finding innovative ways to generate extra cash for the holidays.
Food emerges as a focal point for many, with some opting for deals and variety over premium quality to create shared moments of joy. The emphasis is on bringing people together rather than extravagance. However, not everyone sticks to a strict budget. Some find themselves caught up in the spirit of the season, sometimes overspending in an effort to create magical experiences or meet perceived expectations.
While finances can add stress to the season, it's clear that for many, the emphasis remains on connection, thoughtful gifting, and meaningful experiences. Whether through careful budgeting or shifting focus from material gifts to shared moments, people are finding ways to celebrate within their means.
Interestingly, while spending increases, engagement with financial content decreases during December. But this trend reverses dramatically in January.
Ipsos Iris data reveals that consumers spent nearly 6 billion minutes on finance-related content in January 2024, a 7% increase from December. The first week of January alone saw 656,000 people use a search engine to search for terms that included 'credit cards', up 76% compared to the previous week4. This increased engagement isn't limited to general finance content. Price comparison websites, debt advice services, and other consumer finance resources all see significant spikes in traffic during January.
The suggests complex interplay between holiday spending and financial management. While many consumers increase spending in December, their approach to finances varies widely. This is followed by renewed engagement with financial content in January. This cyclical pattern highlights the diverse ways consumers navigate their finances during and after the holiday season, underscoring the complexity of financial decision-making during this period.
This financial reality sets the stage for how consumers approach the festive season, and as we'll see, how brands are responding to these challenges in their festive campaigns.
"It's mostly wanting to show people I care through gifts and experiences, but it's hard to find what is better when you think if it should be thoughtful or is it too much. There's also this desire of creating magical experience for everyone... I've definitely overspent before, when I see others going all out. It's hard not to get caught up in it, but the end is not fun."
Tidings of Comfort and Joy - Empathy in Christmas Adverts
While financial service providers are largely absent from Christmas advertising, other brands are demonstrating empathy in their holiday campaigns. This approach resonates with consumers, particularly during times of economic uncertainty.
For example, Vodafone emphasizes connection over lavish spending, reminding viewers that meaningful moments don't require large outlays. Sports Direct promotes affordable holiday traditions, offering budget-friendly alternatives to expensive gifts. Matalan uses humour to connect with consumers, while O2 highlights important social issues like data poverty.
These diverse approaches show that brands can connect with consumers' values and concerns in various ways, even if not directly addressing financial anxieties. Ipsos' Brand Narrative research reveals that 17% of brand choice in the UK banking sector is driven by perceived empathy5, and even more in other sectors.
By acknowledging the challenging financial climate indirectly, these brands are building trust and strengthening relationships with consumers. Their campaigns celebrate the spirit of the season while recognising the economic realities many face, striking a delicate balance between festive cheer and financial sensitivity.
Opportunities For Financial Services Providers
As the tinsel comes down and the new year begins, a window of opportunity opens for financial service providers. Consumers are increasingly prioritizing brands that align with their personal values, with 64% of Brits reporting this preference in Ipsos Global trends. This trend, coupled with the post-holiday financial reckoning, creates a prime moment for financial institutions to step in with support. There's a clear demand for more guidance from financial services, particularly for practical advice and tools to manage spending effectively:
This feedback highlights several opportunities for financial institutions:
- Provide tips on wise spending
- Offer links to deals and coupons
- Develop apps or tools to help organize spending habits
- Create resources that are valuable year-round, not just during the holiday season
Moreover, financial service providers have a crucial role to play in educating consumers about safe online practices. With increased online financial activity comes heightened risk, particularly in the post-holiday period. In the previous year, over £11.5 million6 was lost to online shopping scams in the UK during the festive period. By offering guidance on safe online financial practices, banks can both protect their customers and differentiate themselves in the market.
By addressing these needs, financial services can position themselves as supportive partners in consumers' financial journeys, providing valuable resources and support to help manage finances effectively during the holidays and beyond.
I haven't seen anything particular from financial service providers regarding help around Christmas. I am thinking about more tips/advice how to spend wisely, links to sites with coupons, deals, etc. or a form/app/tool that allows customers to organise better their spending habits... Probably I can use something similar all year around and not just for Christmas.
So, I budget it quite early on and I do also have to dip into savings to buy everything I need and repay my savings in the new year, so I am not out of pocket."
I Wish It Could Be Christmas Everyday – Lessons for 2025
As we've seen, consumers are becoming increasingly savvy in managing their holiday finances, from collaborative family budgeting to prioritizing experiences over material gifts. Brands have responded with empathetic advertising that acknowledges these realities while still celebrating the spirit of the season.
For financial service providers, this presents a unique opportunity in the new year. By building on the trust and empathy demonstrated by other brands during the festive period, they can offer timely support when consumers are most engaged with financial matters.
The key lesson? Empathy and understanding are gifts worth giving all year round. By consistently demonstrating an understanding of their customers' needs, financial brands can build lasting relationships that extend far beyond the holiday season.
In essence, while Christmas might be the season of giving, for financial services, January could be the season of guidance - an opportunity to help consumers start the year on a strong financial footing, turning resolutions into reality
Source: 1 Financial Research Survey https://www.ipsos.com/en-uk/financial-research-survey-frs
2 Ipsos Money Talks, November – Christmas spending
3 Bank of England's 'UK spending on credit and debit cards' data series and ONS calculations.
4 Ipsos Iris - https://iris.ipsos.com/
6 National Cyber Security Centre https://www.ncsc.gov.uk/news/black-friday-warning-figures-reveal-rising-losses-scams
Technical note: ©Ipsos 2023, Financial Research Survey (FRS), for 3 months ending December 2023 and 3 months ending October 2024. Results based on a sample of around 3,100 adults (aged 18+) and 12,569 adults (aged 16+) respectively. The survey contacts around 51,000 adults (aged 16+) a year in total across Great Britain. Interviews were face to face, over the phone and online, taking into account (and weighted to) the overall profile of the adult population.
