• Over half (53%) of people said they were planning on giving cash gifts this Christmas, based on a survey of over 3,000 consumers conducted by AJ Bell*
• One in five people are planning to give more cash gifts this year as a result of the pandemic
• Physical cash is the most popular option (46%), followed closely by gift vouchers (44%), with only 21% saying they would use an electronic transfer
• 5% of people are still planning on gifting cash via cheque, and 3% are planning to gift Premium Bonds
• £100 is the average amount gifted, but 13% of people are planning to gift £500 or over
*Survey conducted by AJ Bell & Findoutnow of 3,297 UK adults on 27 November 2020.
Laith Khalaf financial analyst at AJ Bell:
“Digitalisation has taken over much of the global money system, but Christmas is one time when a physical cash token adds a more personal touch than an electronic bank transfer. Most people planning to give pecuniary gifts this Christmas will use cash or gift vouchers, with only one in five saying they plan to make an electronic transfer.
“Two thirds of people are planning on gifting the same amount of cash as last year, but more than one in five say they are going to gift more as a result of the pandemic. Presumably people are gifting more cash because this year Christmas shopping has been significantly disrupted, or perhaps they’ve saved money thanks to the absence of the usual festive temptations to spend money. However it’s also worth noting that just over one in ten people are planning to gift less cash as a result of the pandemic, and that’s unfortunately likely a sign of greater financial strain.
“Gifters are expecting to shell out £100 on average in cash gifts this Christmas, but a significant minority are planning to gift over £500 in total. Regular gifting can be an effective way to reduce inheritance tax liabilities, seeing as each individual has a £3,000 annual gift allowance which is free from IHT.”
Survey results
Of 3,297 surveyed, 1,744 plan to gift cash at Christmas. From these respondents…
|
Which of the following forms of cash gifts are you planning to give this Christmas, rather than a physical gift? (tick all that apply) |
|
|
Physical cash |
45.7% |
|
Vouchers/gift card |
44.4% |
|
Electronic transfer |
20.7% |
|
Cheque |
5.1% |
|
Premium bonds |
2.6% |
|
Are you gifting cash more or less this Christmas compared to last year because of Coronavirus? |
|
|
Significantly less |
4.8% |
|
Slightly less |
6.3% |
|
About the same |
66.6% |
|
Slightly more |
15.0% |
|
Significantly more |
7.4% |
|
Roughly, what is the total amount of cash you plan to give as Christmas presents this year? |
|
|
Less than £100 |
41.9% |
|
£100 |
16.8% |
|
£200 |
15.9% |
|
£300 |
9.0% |
|
£400 |
3.8% |
|
£500 |
5.5% |
|
£600 |
2.4% |
|
£700 |
0.9% |
|
£800 |
0.7% |
|
£900 |
0.2% |
|
£1,000 |
1.1% |
|
Over £1000 |
1.8% |
