Savings clubs for shoppers are to be protected under new laws to be introduced by the Government.
Legislation to be outlined this week will provide greater protection for shoppers' savings clubs - where consumers can pay for goods and services in instalments throughout the year - which are not currently covered by the Financial Services Compensation Scheme.
The average family spends about £740 extra in December, analysis from the Bank of England has shown.
And many UK supermarkets including Asda and other retailers offer Christmas savings clubs to help prepare them for this expensive season.
The schemes allow customers to top up an account throughout the year and receive products and services in time for Christmas.
The new laws mean even if the company goes bust, the money accrued will be safeguarded.
It means shoppers' money will still be protected and it aims to prevent issues such as the collapse of Christmas savings club Farepak in 2006, when thousands of customers were unable to pay for festive gifts.
When Swindon-based Farepak folded in 2006, it left 116,000 customers with losses of £37million and many unable to pay for festive gifts.
Consumer minister Paul Scully said: "We're seeing rising costs caused by global pressures around the world, which is why we're taking action worth over £22 billion this year to help UK families with the cost of energy bills and ensure people keep more of their money.
"Now more than ever, families' hard-earned savings need to be protected. New laws will crack down on dodgy dealers who have no plans in place to protect shoppers' savings if their business goes to the wall. We'll make sure scandals like Farepak never happen again, where thousands of families, many on low incomes, lost all they had saved for Christmas."
The law will apply to Christmas savings clubs and other prepayment schemes that are forms of a savings club.
