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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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The Government has part-nationalised Royal Bank of Scotland, Lloyds TSB and HBOS in an attempt to save the UK banking industry.

The £37bn bailout will see the Treasury buy 44% of the new Lloyds HBOS superbank and 60% of RBS.

The Government will buy £20bn of RBS shares and then a further £17bn is being pumped into HBOS and Lloyds TSB upon completion of their renegotiated merger.

Barclays says it will raise £6bn through private capital raising. Nationwide and Santander, which owns Abbey and Alliance & Leicester say they will also raise more capital. HSBC will inject £750m into it’s UK business.

The bailout has raised the shares of the banks, and bankers hope it will add much-needed confidence to the struggling markets.

The Government will have specially appointed directors on the boards of the banks to make sure they adhere to the new conditions of the bailout.

Alistair Darling, the chancellor says he expects the banks to make no bonus payments to board members this year and to ensure that bonus structures reward long-term value creation in the future.

RBS chief executive Sir Fred Goodwin and HBOS chief executive Andy Hornby have already resigned, without any severance pay.

The Prime Minister Gordon Brown has promised the Government will be the "rock of stability" for British families and businesses. It has also provided another £50bn injection to help revive the banking sector.

Darling says: "It is necessary because we are going through quite extraordinary circumstances the world over and I'm determined to do everything we can to stabilise our banking system and make it stronger."

The British Bankers' Association says: “It will take a little time for these measures to work through. We are pleased that other governments in Europe and elsewhere will now follow the lead taken by the UK. We also hope taxpayers need to hold a stake in our banks for as short a time as possible.”
Kevin Mountford, head of banking at moneysupermarket.com, says:
"This bail-out will no doubt change the shape of banking for years to come, but what will happen to consumers?

"Once we see a level of confidence and security returning to the market, there will start to be more interbank lending, which could trigger a reduction in savings rates.

"However the desire for retail inflow will remain strong so it is bank and building society mergers and acquisitions that presents a greater risk to interest rates as it is likely to reduce competition."

The Intermediate Mortgage Lenders Association executive director Peter Williams says the rescue package is small in terms of helping homeowners, but is “hugely significant” to the banking sector.

He says: “The pace with which that moved from being an idea to being a reality suggests the pressure that all the major banks are under. £50bn is the kind of sum that people are looking for and this just shows the scale of the issue.”

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Global recession fears returned to centre stage on Wednesday after trillions of dollars pledged by governments around the world for bank bailouts eased the threat of imminent financial meltdown.

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After snapping up stakes in two British banks hard hit by the financial crisis, Spain's biggest bank, Santander, has turned its sights across the Atlantic with the purchase of troubled US lender Sovereign Bancorp.

Property sales collapse, prices plummet
Estate agents are selling less than one property a week as a lack of mortgage finance hits the number of people moving house, fuelling plummeting prices, a surveyors' body said on Tuesday.

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Wine cellars have been taking a hit from the global credit crisis and it isn't because the owners of rare bottles are drinking more — it's because they have been selling to raise cash.

US to buy stakes in 'broad array' of banks
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Canada to vote amid economic uncertainty
Canadians go to the polls Tuesday for a third election in four years, likely to return the Conservatives to office in the first G7 ballot since the start of a global financial meltdown.

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