BY JOHN ELLIS, FINANCIAL ADVISOR
As we usher in 2026, reflecting on the 2025 festive season reveals a sobering reality. If your shopping trolley felt heavier on the wallet last Christmas, the figures confirm it. The average Irish household spent roughly €700 more on celebrations in 2025 than five years earlier in 2020. This was not isolated to a few items; it spanned every festive category, from the turkey to fuel for family trips.
Before Christmas 2025, the buildup was intense. Families budgeted ahead, yet escalating prices still stretched plans. Food and drink costs rose €220 from 2020, with turkeys up 31% to €32.75 for a 5kg bird and fresh produce climbing 35%. Gifts added €180 more, as toys and clothing increased between 22 and 24%. Energy bills surged by €125, petrol is 40% higher. Tavel and entertainment jumped €95 and dining out increased up to €45. What cost €1,800 in 2020 hit €2,500 in 2025.
What fuelled this? Inflation had built steadily since 2020, with food peaking at 12.4% year-on-year in early 2023 before easing. As usual prices never returned to previous levels. Global supply chains, Brexit hurdles, and energy swings pushed electricity from 20 cents to 36 cents per kWh. Retailers grappled with wage rises and overheads, passing on some of the costs while margins shrank. A Dublin toy shop owner said anonymously: “We absorbed what we could, but many small shops didn’t make it through.”
Pre-Christmas, some households got creative. Shoppers started in September, buying in and gaining 15-20% in savings. Secret Santa limited adult gifts to €30-€50, cutting bills from €400. Families chose experiences like pantomime tickets over pricier goods, or homemade goods to reduce food expenses. Yet, economist Austin Hughes warned nearly one in five could not afford it. Over half had less cash than in 2024, with 9% borrowing, up from 7% two years prior and 42% using credit, including buy-now-pay-later options that glossed over costs in the short term.
Christmas bills are looming large in January. One in five borrowed, with 20% needing three months to repay. Credit cards charged from 13-26% interest if uncleared. For example, a €1,000 spend at minimum repayments could drag on for eight years. Miss a repayment with a Buy-now-pay-later plan and you will incur fees, escalating to collections. Charities like Barnardos reported families skipping heating bills for kids’ gifts, risking arrears, with 187,000 customers already 90+ days late on electricity pre the holidays.
This pre-post-split exposed broader strains. Beforehand, joy turning to worry for middle-income homes, where €2,500 ate 8.3% of the average income. Afterwards, poverty rose with child poverty hitting 8.5% as repayments clashed with essentials.
In hindsight, 2025’s price increases stemmed from sustained inflation, now here to stay. With forecasts for 2-3% rises in 2026, prices will not fall back either. Families and shops adjusted via early promotions and value lines. Ireland’s 10.7% growth masked the squeeze, as many felt sidelined. Yet, resilience did prevail, keeping the spirit alive for another year.
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