Are older Aussies better prepared?

Everyone is hoping for a COVID normal Christmas this year, and health wise around Australia everything appears to be on track.

However, when it comes to the financial side of the festive season things are still going to be very different.

Research reveals that four in five people will spend less or cut back on Christmas and summer holiday expenses this year as a result of the pandemic.

However, despite some surveys revealing that older Australians are the hardest hit by the financial impact of the pandemic, they are the least likely to cut back on the festive fun, according to the money.com.au end of year spending study.

The survey of 1013 Australians from all age groups and walks of life found that 44 per cent of households were planning to spend less on Christmas celebrations, food, gifts, and a summer getaway this year, compared to previous years.

However, those aged 65 or older were significant outliers, with only 32 per cent planning to spend less and around 64 per cent expecting to spend the same amount as last year. Only 46 per cent of all respondents said they were planning to spend the same as last year.

Retirees, regardless of their age, were also more likely to spend the same amount on Christmas expenses as last year, with 60 per cent falling into that category and only 36 per cent planning to spend less.

Even people who were still in full-time work were only 44 per cent as likely to spend the same amount as last year, while those who were unemployed or not doing paid work were only 32 per cent likely to spend the same amount as 2019.

Among respondents who had been budgeting for December–January expenses, only 31 per cent were planning to dip into their savings to cover these costs. This was vastly different for those aged 65 and over, with around 45 per cent to use their savings for the expenses.

Money.com.au financial expert Helen Baker said that cutting back on Christmas and holiday expenses was a good decision for many this year.

“With an uncertain economic recovery, it may be wise to cut back spending on Christmas and holiday expenses,” Ms Baker said.

“I also encourage people to be conservative in their spending, particularly if they are dipping into their savings.”

Perhaps reflecting the changes to the reality of how Christmas gatherings will work this year, the only area where older Australians were in tune with the rest of the survey respondents came when talking about the amount of money that would be spent on lunch and dinner this year.

Only 25 per cent of those aged 65 or older were planning to spend less on their Christmas meal this year, which is broadly in line with the other age groups where 29 per cent were planning to spend less.

While most borders should be open to some extent by Christmas, there is still a reluctance to spend on travel, with 38 per cent of respondents not taking a holiday this summer, while 20 per cent will reduce their holiday budget.

Money.com.au found that nearly a third (31 per cent) of respondents are making financial sacrifices to be able to afford some holiday expenses.

Are you planning to spend more, less or the same on your Christmas expenses this year? How do you expect your Christmas to differ this year?

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Related articles:
https://www.yourlifechoices.com.au/finance/news/why-the-same-product-has-multiple-prices
https://www.yourlifechoices.com.au/finance/news/products-and-services-best-avoided
https://www.yourlifechoices.com.au/finance/news/calls-to-keep-responsible-lending-laws

Written by Ben

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