Asda are right: it's time to save for Christmas

christmas savings©iStock.com/JulieWeiss

AUGUST: the month of beaches, ice cream, some of the warmest days of the year and, if you're Asda, Santa Claus.

The supermarket's decision to install grottoes in stores across the country last week raised more than a few eyebrows and some hackles among the "Christmas gets earlier every year" crowd.

In fact, it was supposed to: this wasn't a bid to corner the market in kids' presents but a bid to promote Christmas savings cards.

And if you think the start of the new school year is too early to be thinking about Christmas in that sense then, I'm sorry, you're wrong.

'Tis the saving season

In April this year, Halifax revealed that one in five people they polled aged 18-44 were still trying to pay off the credit cards, overdrafts and loans they took out to pay for last Christmas.

9% estimated that it would take them until 2013 to finish paying off 2011's Christmas.

So what about 2012?

While 28% of people said they intended to save for Christmas this year, a whopping 47% said that they didn't plan to save at all.

This is a worrying figure, considering that rising prices and stagnating wages aren't the ideal ingredients for a merry last minute Christmas.

Ways of saving

As we noted above, Asda's Santas were designed to promote the supermarket's Christmas savings cards which allow shoppers to receive a monetary bonus for saving money on the card until 18 November.

For example, someone who saves £144 will receive £6 while a saving of £49 would earn £1.

It's more or less a Christmas savings scheme: an old idea that has received something of a bad press in the past few years.

£37 million was lost by 120,000 people when one Christmas savings firm, Farepak, collapsed in 2006, for example.

Though new rules from the Christmas Prepayment Association (CPA) ostensibly suggest that customers' money is safe from a similar disaster, the reality is a little different.

If a Christmas savings firm goes bust, customers' money will still be lost.

The CPA rules only apply to the bank or building society holding the money. If this goes bust then customers can expect compensation but not before.

Cutting back

For those who don't intend to save and even those who do, Christmas on the cheap is becoming another appealing option.

Asda's own research suggests that a quarter of mums intend to cut back on Christmas spending this year.

Last year, 60% of respondents to a Uswitch poll said they'd be cutting back for Christmas, though the vast majority - 78% - only expected to save less than £100.

A survey carried out by American Express, also just before Christmas last year, found that many people are coming up with specific techniques to reign in their yuletide outgoings.

Money saving techniques vary, according to the Amex report, and the most popular is setting a financial limit on how much family members spend on each other.

25% of those surveyed said that they were agreeing to play at 'Secret Santa' and select just one family member or friend to buy a gift for.

While it may damage sock sales, the concept of presents for the sake of presents is proving increasingly unpopular.

38% of those polled said they intended to request specific gifts in order to cut back on unwanted surprises, while 34% planned to give only vouchers or cash.

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