The credit crunch is set to cause a £3billion reduction in spending over the festive season, prompting fears that it won’t be a very merry Christmas for many.

Certainly, a survey has revealed that 49 per cent of adults are dreading the festive season because of expensive food bills and high inflation costs.

This year the average household will spend £483 at Christmas – down £108 on the 2007 average spend.

Add to that the fact that one in four people who ran up debt last Christmas are still repaying the bill, and it looks like Christmas won’t be a cracker for many.

But Britons are renowned for making the best of things, and the survey, by Travelodge, found that people will be trying to make ends meet this Christmas by: l Buying less presents and not sending any Christmas cards.

l Opting for cheaper food and alcohol.

l Going to fewer Christmas parties.

l Avoiding entertaining family and friends.

l Not buying new clothes and Christmas decorations.

More than half of the nation (56 per cent) say they’ll save money by reducing the number of gifts and cards they give, with the main victims of the Christmas gift cull being colleagues, neighbours and friends, followed by uncles, aunts and cousins, and then even closer family including grandparents, parents and partners.

The second biggest Christmas expense cash-strapped Britons will be cutting back on is entertaining, with 43 per cent of those questioned saying they’ll save money by shopping in budget supermarkets, opting for cheaper brands, and adapting their Christmas dinner menu with cheaper alternatives – such as swapping turkey for chicken.

Other Christmas budgeting measures include avoiding seeing family and friends over the holidays, recycling Christmas decorations, wearing old clothes and attending fewer Christmas parties.

And a very frugal 67 per cent of people say they’re hoping to spend Christmas Day with family or friends so they can avoid having to shell out for Christmas dinner, which can cost around £156.

Of those who still intend to host Christmas dinner, 31 per cent will ask their guests to bring food and drink with them, 24 per cent will buy cheaper brands of crackers and food and hide the boxes from their guests, and nine per cent will ask their guests for a cash contribution towards the cost of dinner.

And it’s ‘bah humbug’ for nine per cent of people, who said Christmas will be cancelled in their homes this year because they just can’t afford it.

Tips for saving money include searching magazines, newspapers and consumer websites for money-off coupons, shopping with a friend to take advantage of buy one get one free offers, and buying own-brand goods.

Sainsbury’s estimates that switching to own-brand goods can help slash 20 per cent off food bills – and could save a family of four £452 per year.

However, research by Playmobil found that while 83 per cent of parents were concerned about the credit crunch, 67 per cent said they weren’t going to let it affect their purchasing power for the kids this Christmas.

But, to do so, over half of the families surveyed said they’d be sacrificing nights out, and 14.8 per cent said their partners wouldn’t be getting a gift so the kids would receive what they wanted.

But it's not all doom and gloom – the one thing UK families won’t give up is their Christmas tree, with 96 per cent of parents vowing there will still be a tree lighting up their living room this year.