Almost 4 in 5 (78%) of Australian households will spend less or completely forgo expenses for social events, gifts and summer holidays in 2020, new research from financial information platform, has found.

On average, $19.8 billion is spent on gift purchases by Australians each year, according to The Financial Planning Association. However, the survey results found that 39% of people will spend less on Christmas gifts, while 12% said they won’t buy gifts at all.

The local travel industry is also likely to suffer. Even with states open for regional travel and some borders open, 38% of respondents will forego a holiday this summer, while 20% will reduce their holiday budget.

The findings also reveal 28% of households will spend less on Christmas celebrations and Christmas lunches or dinners this year, while 10% won’t have a Christmas celebration at all.

Overall, 44% of households will spend less on Christmas celebrations, food, gifts, and a summer getaway this year, compared with previous years.

Among respondents who have been budgeting for this period, 37% have been setting aside funds this year to pay for it. Meanwhile, 32% said they will choose a credit option – such as credit card, buy now, pay later services or layby – to fund these expenses. One in three (31%) will dip into their savings.

Licensed financial adviser and spokesperson, Helen Baker said: “With many households experiencing financial hardship this year – and with an uncertain economic recovery – it may be wise to cut back spending on Christmas and holiday expenses. I encourage households to review their financial situation now to determine how much they can spend this summer. I also encourage people to be conservative in their spending, particularly if they are dipping into their savings.

“Consumers may also want to consider not incurring credit card debt for these end-of-year expenses in case they are out of a job next year. However, if you are in a good position and use your credit cards for points, you may want develop a strategy for it.”