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Keeping the Christmas magic alive may be more difficult because of the credit crunch, a claim suggests.

Children are aware that their parents' spending habits have had to change, while ten per cent of adults admit that they have had to fork out less on their youngsters, LV= reveals.

Indeed, 44 per cent of those aged between eight and 18 believe that they will receive cheaper gifts when December 25th comes round.

"Once again, this illustrates the importance of families saving as much as they can, not only towards Christmas but for the future generally," claims Mike Rogers, LV= Group chief executive.

However, taking out a loan could be an option for families that do not have enough savings to cover the cost of new year property renovations or a much-needed holiday.

Secured loans - which may have a lower annual payment rate than other loans - could be useful for the 28 per cent of Britons who Alliance & Leicester found have not saved a penny during 2008.