We expect to spend �150 less than we anticipated four years ago

Higher interest rate and big personal debts are lowering expectations of how much people will spend on festivities.

According to Abbey, people expect to spend �423 on average, 5% down on 2003's anticipated spend of �446 each.

It is the third year in a row that predictions have fallen below �450, and well down on 2000 and 2001, when the predicted spend was �600 each.

People over 35 are planning to spend the least, in contrast to 15 to 34-year-olds who intend to spend more this year.

Those intending to exercise the most restraint are 55 to 64-year-olds, who plan to spend around �344, or 23% less than last year's �449.

Debt binge

In July, the amount of money owed by consumers broke through the �1 trillion barrier for the first time.

Four Bank of England base rate rises this year may be starting to bite Angus Porter, Abbey

Most of this debt is in the form of loans secured against homes.

Debt charities have warned consumers from overstretching themselves and the survey suggests a few consumers may now be heeding this advice.

Slightly fewer people plan to put off the cost of Christmas by paying with plastic - 19% will use credit cards compared with 22% last year.

However, one in ten people have not thought about how they are going to pay for Christmas this year.

"People are being realistic about what they can afford to spend on Christmas this year, and pretty sensible about how they're going to pay for it," said Angus Porter, Abbey's customer director.

"Four Bank of England base rate rises this year may be starting to bite."