Press releases

The Pinch That Stole Christmas: A third of UK adults have seen disposable incomes shrink leaving festive funds stretched

7 Dec 2021


Full press release

  • One in three (35%) UK adults have experienced decreasing disposable income over the last six months while one in seven (14%) worry they won’t be able to cover the costs of the Christmas they had expected
  • Generation X are the most likely to have seen purse strings tightened, with 42% experiencing a decrease in their disposable income
  • Increases in essential costs are pushing people into financial difficulty; from food and drink (16%) to transport (19%) and record energy costs (30%)

One in three people (35%) have seen their disposable income shrink, prompting fears of a leaner Christmas for people across the UK, according to new research from Legal & General Retirement Solutions. Mid-lifers are those most likely to experience the ‘Christmas Crunch’, with 42% of 41 to 56-year-olds (Generation X) feeling the pinch1.

As the cost of living soars, significant hikes in the price of energy bills (30%), transport (19%) and food and drink (16%) are pushing many people across the country into financial difficulty. One in seven UK adults (14%) now worry they won’t be able to afford the Christmas they had expected, as a result. A third of UK adults are cutting back on non-essential treats, such as gifts or boozy nights out and one in five (19%) have had to dip into their savings and investments just to meet their essential bills.

This has prompted concerns that those in midlife, who have been hardest hit, might see an impact on their retirement as they use long-term savings to boost their disposable income. A third of Gen X (33%) have already decreased their savings contributions in the last six months and with costs soaring their incomes are likely to be put under increasing pressure, even before factoring in the cost of Christmas. Separate research2 by Legal & General found that the average over 50s workers had already lost more than £3,000 from their retirement savings pot due to pandemic cutbacks.

Emma Byron, Managing Director, Legal & General Retirement Solutions: “While some are understandably worried about rising Covid cases cancelling Christmas this year, the increased cost of living already poses a threat to the festive season.  Families across the UK are having to cut back on non-essentials and dip into savings just to cover their bills, so the cost of Christmas is likely to be an extra worry. This is particularly true for people in midlife, who have seen their disposable incomes hardest hit.

For people nearing retirement, a temporary pause on contributions can have long-term implications on their later life savings. Although the current climate is challenging, we would urge people to maintain their contributions, as even a small amount can make a big difference to your standard of retirement. We offer a range of resources to support those in midlife and to help them get them back on track with their finances.”


1Opinium survey of 4,000 UK adults in the UK was conducted between the 31st October and 3rd November 2021
2 Opinium survey of 2160 UK Over 50's in the UK who have not retired between the 9th and 13th August 2021, 224 of which are saving less towards retirement, compared to before the pandemic.

For further information

Kia Mclean01

Kia Mclean

PR & Marketing manager

Legal & General Retail Retirement

Notes to editors

Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia. With almost £1.3 trillion in total assets under management*, we are the UK’s largest investment manager for corporate pension schemes and a UK market leader in pension risk transfer, alternative asset origination, life insurance, workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.

* at 30 June 2021

Legal & General Retail Retirement’s mission is to help its customers lead longer, healthier, happier lives. We believe everyone should be able to have a ‘more colourful retirement’. The Division comprises the Group’s retirement savings and income, later life lending and care solutions businesses. In 2020, LGRR wrote £910 million of annuity premiums and issued £791 million of lifetime and retirement interest only mortgages.

(As of June 2021)