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ISCOVER
Staff Reporter
More than half of all Australians are likely to make Christmas purchases with cash rather than on credit this festive season, according to new research from RAMS.
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The lender’s new consumer sentiment survey revealed the average amount of purchases made by respondents will amount to $1,100, marginally down on last year's $1,113 in this financially conservative market.
While a majority of Australians believe they will spend about the same amount as last Christmas, one in five respondents said they will spend almost 40 per cent less than last year because they are struggling with their finances.
A further 20 per cent of Australian consumers are expected to spend almost 10 per cent more than last year.
RAMS chief executive Melos Sulicich said this suggests a 'two-speed Christmas economy' is at play, comprising those who are comfortable with spending due to their own financial security and those who are having trouble making ends meet.
"People are generally taking a cautious approach to Christmas spending with more than half of respondents choosing to use cash to buy presents to avoid credit card debt, a reflection of a savings culture during an uncertain economy," Mr Sulicich said.
"It's no surprise. Shoppers are being more careful about loosening the purse strings. Only 17 per cent of consumers say they will dip into their personal savings to fund their festive celebrations.
"Our experience shows nine out of 10 RAMS saver customers hope to avoid withdrawing their money from savings accounts to take advantage of bonus interest rate offers when they make no withdrawals in a month and deposit a minimum of $200.
"Australians are spending an average of $13 less on a single gift this year compared to Christmas 2011. The 30-39 age bracket is likely to spend the least this year, at 42 per cent less than last year, suggesting they are taking a more conservative approach due to lack of confidence in the economy," he said.
The results show the biggest gift buyers are those aged in their fifties, who said they are likely to spend over 50 per cent more this year than last year, with the maximum cost of a single gift totalling $207. This suggests they are more financially comfortable, may be the traditional hosts of Christmas family events and are possibly purchasing gifts for grandchildren.
