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Homeowners are already bracing themselves for a lean Christmas in the face of the credit crunch.

A survey by Norwich and Peterborough building society has revealed that the current financial climate has forced some people to rethink how they will spend over the holiday - with more than half of those polled revealing they are planning to be far more frugal with the festivities this year.

Customers have admitted they will be limiting gift budgets, buying less food and drink, and even have a go at making presents themselves.

An unsurprising 57% of those polled said they were planning to spend less this Christmas and of those, two thirds said that they would make savings by buying cheaper or fewer presents.

Just under a half revealed they would buy less food or forego meals out in order to save money, while one in ten were even cutting down on decorations.

However, of those customers who said they would be spending the same as usual on Christmas 2008, 58% said they could do so because they had saved up for the festive season all year round - almost a fifth of them have been saving since the summer.

A third of those polled said they were only expecting to spend up to £500, while only 3% were looking at spending between £2,000 and £5,000.

Gary Lacey, N&P savings products manager, says: "The results of the survey show us that putting money into a savings account on a regular basis seems the best way of making sure this Christmas will still be a merry one, despite the turbulence in the financial markets and the increased cost of food and utility bills.”

Fool.co.uk says the saving habits of Brits right now are just not good enough - it says most consumers are still not equipped for the pain that lies ahead.

According to its calculations, Fool.co.uk says being able to survive on less than four-fifths of our monthly salary is crucial given that the typical household spends £23,712 a year and the average annual income for British household is £28,070 after adjusting for deduction of taxes and receipt of benefits.

The website says seven out of 10 people have less than a fifth of their monthly income remaining after deducting household expenses.

It also found that one in seven people have no money left over each month and one in eight people spend more than they earn

David Kuo, head of personal finance at Fool.co.uk, says: "We are only in the early stages of a recession so we have yet to feel the full impact of the economic downturn. Consequently, it is important to tackle our finances head on now before it is too late to do anything about it.

"Ensuring that we can survive on less than four-fifths of our current income is vital. We must cut back on household expenses and start putting money aside immediately. A cash cushion stuffed with at least three month's worth of household expenses can be a great comfort in an economic downturn.”

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