How Credit Unions Are Supporting Families to Balance Budgets During the Festive Period

Friday 19 December 2025

Credit unions across the country are going the extra mile to support members this Christmas and into the new year, as growing numbers of households face financial pressure during the festive season.

This year, many families across the UK are entering Christmas under significant strain. Annual research from Fair4All Finance shows that 10 million people saved less or stopped saving altogether during the year, reducing the financial cushion many rely on at this time.

This is particularly concerning when set against wider national trends. Data from the ONS Households Savings Ratio Survey suggests that overall household saving has increased since the pandemic, masking the reality that many lower-income households are being left behind.

Further research from StepChange Debt Charity highlights the scale of the challenge, revealing that 27% of people expect to struggle to afford Christmas this year, underlining widespread concern about festive spending.

To help ease this pressure, many credit unions offer dedicated Christmas savings accounts that allow members to put aside small, manageable amounts throughout the year. Some schemes also allow members to start saving for Christmas 2026 while repaying borrowing from this year, helping to break the cycle of festive debt.

For those who do need to borrow, small Christmas loans from credit unions can provide a safer alternative to high-cost credit. These loans often start from low amounts, avoid hidden charges, and come with flexible repayment terms designed to keep borrowing affordable.

Credit unions including Wave Community Bank and Just Credit Union have also been sharing practical, low-cost ideas to help households manage Christmas spending this year and plan ahead for next year.

Emma Norledge, Deputy CEO at Wave Community Bank, said:
“Most people’s monthly budgets don’t allow for the extra costs of Christmas so we support our members to manage their money for the festive season throughout the year with our Christmas Savings account, where the savings are locked away to 1st November. Planning for Christmas spending is important and any savings put away in advance – no matter how small – help when it comes to working out your Christmas budget.

“We also help with savings hints and tips on our social media to help manage the costs without losing the fun. This year we’ve done a weekly countdown with savings ideas to help with planning and making a difference to Christmas spending from the beginning. This year, we have also attended Christmas markets across Kent and East Sussex to talk to people about the dangers of loan sharks and borrowing from them for Christmas. This awareness campaign, in what could be seen as unlikely venues, has been really effective in drawing attention to this issue and how credit unions are here to help at this time of year.”

Steve Barras, Development Manager at Just Credit Union, added:
“We are all about saving and we do encourage all our members to open a Christmas savings account and put a little away each week. If you’ve not done so for this Christmas, its never too early to start planning for next year.

“Whilst we encourage people to save for Christmas, we recognise people often need to borrow. One of the biggest dangers is using unplanned borrowing. As Christmas gets closer it is easy to pay for presents and food on credit cards or overdraft, but it can soon become unmanageable and lead to financial problems in the New Year. It is especially tempting to use ‘Buy Now Pay Later’ offers, but these can quickly add up and unless you have a clear plan to repay these loans within the interest free period it can again become a big headache.

“If you are going to borrow it’s important to go to an ethical properly regulated lender like a credit union. They will ensure the loan is affordable and is paid of in plenty of time for next Christmas. They’ll also set you up with a savings account so that you are putting a little away for a treat an emergency or for next Christmas”

Matt Bland, Chief Executive of ABCUL, said: “Credit unions are seeing first-hand how difficult this Christmas is for many households. With millions cutting back on saving or feeling pressure to borrow, it’s vital that people know there are safe, affordable alternatives on their doorstep.

“Credit unions offer practical support – from small, sensible loans to Christmas savings schemes – that help families stay in control and avoid starting the new year in debt. We encourage anyone feeling the strain to speak to their local credit union early and explore the options available.”