Christmas is just around the corner and our annual festive splurging is starting to step up. But with households expected to spend an average of £614.96* on Christmas this year, many are wondering why they didn’t put more money aside for the festivities.

Although it may seem a little early to start thinking about Christmas 2016, the fact that many of the best savings deals are fixed for 12 months means that, if you start now, your savings account will mature just in time for next year’s spending spree (see table below).

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“It’s amazing that, while we know Christmas will come round every year, its eventual arrival is still a surprise, leaving us all wishing that we had put some money aside to cover the cost of our Christmas cheer. Well, with some careful planning, we can all deck the halls next year.

“By putting just £50 a month into Leeds Building Society’s Regular Saver account, savers will be well on their way to covering the cost of the average household Christmas spend, and by putting more away each month, investors will have more than enough to indulge in a few extra treats from Santa.

“Regular savings accounts give savers the discipline to save consistently by encouraging monthly deposits. The amount you must put aside can vary from a minimum of just £1 all the way up to a maximum of £3,000 a month.

“By opening a regular savings account, savers can potentially earn some of the highest rates of interest on offer at the moment. Indeed, rates of up to 6% are achievable** if you a hold a current account with the provider. However, savers must be aware of the limitations: to curb any temptation to dip into your pot before it matures, many accounts charge a hefty interest penalty for withdrawals. Savers also need to ensure that they are able to commit to the monthly payment as they may be penalised for missed deposits. However, this can be easily avoided by setting up a direct debit.

“Of course, money saved in a regular savings account can go towards any long-term purchase, but by getting into the habit now, savers can build up a nice chunk of cash for next year’s yuletide.”

*Travelodge Christmas Report 23.11.15

** Please see attached for more details on these accounts.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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