Ways to save for Christmas

01/08/2008

It may seem early to be thinking about the Christmas party season, but with many families suffering from the continued rises in food and fuel bills, it's time to start planning for the Christmas finances.

The average person spends £400 a year on Christmas gifts for loved ones. There are also costs such as Christmas parties, and festive food and drink. It makes sense, therefore, to start putting money away for Christmas.

The widely-publicised collapse of Farepak in 2006 has made many families think twice about saving through hamper and voucher companies. Only part of the money was repaid, leaving 150,000 people a collective £40 million out of pocket. There are other Christmas savings companies of course, but the return is often less than it's possible to get by putting money away in a savings account or building society.

In fact, some financial institutions offer special Christmas savings accounts. Skipton's Christmas Saver, for example, pays 6.8% interest. Between £10 and £250 a month can be put away. Withdrawals cannot be made until a month before Christmas.

It's not just banks that offer customers ways to save for Christmas. Several supermarkets run Christmas clubs, where the customer puts money onto a card or buys savings stamps in order to receive a bonus. However, the money has to be spent in the supermarket that's running the scheme.