New figures from Axa show that the average pensioner will spend £346 on presents this year, 21 per cent more than in 2005.
To pay for this, some 900,000 (eight per cent) are set to turn down their heating or use less energy during the coldest months of the year.
Pat Brady of Axa urged pensioners to create a debt management plan instead of cutting back on warmth.
“Christmas finances are a tricky area, and whether you’ve saved for months or buy on impulse, like everything else in life, a little financial planning goes a long way,” Ms Brady said.
“Whatever stage you are at, planning for family and calendar set pieces such as birthdays, anniversaries and Christmas is important and really benefits from a bit of attention.”
Around 25 per cent of pensioners do without new clothes so they will have more money for presents, 21 per cent abstain from hair or beauty treatments, 17 per cent socialise less, and 15 per cent avoid expensive Christmas foods.
However, the good news is that most pensioners have heeded Ms Brady’s advice, with 78 per cent having a debt management plan by saving money each month.