With the festive season just around the corner many retailers have already to started to promote their winter ranges and Christmas offers. It seems remarkable that every year shops seem to start their Christmas promotions a little earlier to maximise this annual shopping bonanza. However, this year it is predicted that Santa may not be as kind to retailers as customers start to really feel the pinch and cut back spending.

Historically, to help people buy their family and friends their wish lists for Christmas many institutions run Christmas clubs. These clubs are essentially a savings vehicle whereby a person sets aside a certain amount of money every month and use it to by Christmas presents at the end of the year. Interestingly, Christmas clubs started during the great depression in the late 1920s, which is what some commentators have compared the current period of uncertainty too, so it seems relevant to take a closer look at these clubs.

A Christmas club can literally be started by anyone from a group of friends to a variety of companies and department stores. However, one must be wary as typically there are a host of restrictions that may go with the club. Additionally, the consumer law in this area is weak and in the event the institution collapses the chances of getting any money back is slim. This is what happened a few years ago to Farepak who went into liquidation, taking with it an average of £400 per customer .

Many people feel that Christmas Clubs are a great way to help budget during the year as they offer ‘better than average’ rewards at Christmas. With interest rates likely to go down further this makes this type of savings more attractive, but on the whole it seems that due to the negative press and restrictions Christmas Clubs are not as popular as they once were.