Two reports show how COVID-19 will impact on spending and support for charities over Christmas, with the South West likely to be the worst affected area nationally

Two reports on how COVID-19 is likely to impact on spending habits over Christmas 2021 have been published recently. The first is based on a UK-wide survey by retirement housebuilder McCarthy & Stone, which found that, on average, UK households will be spending over £100 less on the festive season than in 2019 and 2018, but in some areas of the UK people may be able to spend more than usual.

The UK-wide survey revealed the national average spend figure for 2020 to be £419.19. This is almost £150 less than 2018 and 2019 where the average spends were £560 and £567 respectively.

The reduced spend was predominately attributed to COVID-19, with nearly half (47.7%) of respondents citing the financial issues it has caused as a key factor and McCarthy & Stone’s data showing that 20% say they will subsequently spend ‘less’ or ‘significantly less’ than last year.  4% overall intend to spend more on Christmas this year.

The South West may see the lowest spend with people here expected to spend £374.05 – £45 lower than the average. However, the outlook looks brighter in some areas with the Welsh set to spend the most this year, at £460 per household – over £40 more than the average. Households in Scotland and Northern England will also spend more than average at £457 and £445 respectively.

On a city-wide level, Liverpool is where the survey found the biggest festive spenders will be this year, with an average spend of £545.28, while at the opposite end of the spectrum, people in Sheffield plan to be the most frugal, spending £366.13.

The second report by The Big Give, entitled “Christmas, Charities and Coronavirus” surveyed over 1,000 UK charities and found that since the start of the pandemic, almost two thirds (63%) of charities have seen income decrease, at an average of 43% per charity. Over half (55%) of charities have reported an increase in demand for their services since the pandemic hit. However, many expect to raise less money this Christmas than usual for this time of year.

Nearly two-thirds of charities (63%) expect donations this year to be lower than usual, while at the same time 40% expect to see demand for their services increase over the Christmas period.

In response to the impact of the pandemic, charities are spending down on reserves (41%), reducing service delivery (24%) and restructuring (23%). In addition, 60 of the 1,000 surveyed are considering mothballing or closing completely.

Some causes are particularly vulnerable. The report shows that while almost a third (31%) of charities across the sector have already experienced both decreased voluntary income and increased demand for services since the pandemic, homelessness/refuge charities saw the greatest demand, up 81% since the pandemic hit, followed closed by mental health service charities (77%).

The survey shows that the decrease in income has hit smaller charities hardest, with the smallest (income under £100k) reporting an average decrease of around half (51%) of their total income. The charitable cause sectors experiencing the largest drops in income so far are Armed Forces/veterans causes, sports/recreation, cancer and older people.

Some areas have been worse affected than others, with charities in the South West (76%), East Midlands (69%) and Wales (69%) reporting the greatest reduction in income.

The report was compiled following a survey of 1,011 UK charities was conducted as part of research for the Big Give annual Christmas Challenge. It offers the public the opportunity to have their donations matched between midday on 1 December and midday on 8 December, and saw a 24% increase in applications this year.

The 2020 campaign will support over 750 charities, and has been endorsed by more than 20 celebrities, including Jo Brand, Sue Perkins, Sir Michael Palin, Tom Kerridge and Sophie Ellis-Bextor.

Source: UK Fundraising