Recent surveys have reported that only 15% of the UK population have put aside money to pay for Christmas. With reduced levels of spending and less credit cards in circulation, it could be a lean holiday period for retailers.

Seven out of ten (71%) plan to pay for Christmas using their regular monthly income, while 14% will put their Christmas spending onto a credit card. Nearly five million Britons are still paying off debts from last year’s festivities.

This year’s Christmas spending binge is predicted be at least £11 billion, despite many people vowing to make spending cutbacks over the festive season. Approximately two in five (43%) plan to spend less on gifts than they did last year, while 31% said they will only purchase presents for their immediate family.

62% are keen to make sure the recession doesn't spoil the "magic of Christmas." This leads to concern that people who haven’t saved for Christmas could end up overspending. There are further worries over the effect this last minute spending will have on the economy in the coming months.

Many people are likely to be short of cash as we begin the new year, which won't be a good start to 2010.

Many retailers are very cautious over their prospects in the run up to yuletide. One spokesperson for the jewellery trade spoke about severe cutbacks in spending trends throughout the year and his trepidation over how this would affect the holiday. He said that some of his colleagues were only "hanging on" in the hope that Xmas might be the turning point and save their businesses.

It will be a nervous time for many and could potentially define the economy for the next few months.