Dh and I have got used to being misers - difficult spending even though we have more money now

Oh, this is familiar!

We decided a year ago that we were going to start spending some of our savings. We’re retired, we are lucky enough to have reasonable and index-linked pensions, and my husband has a life-limiting illness so won’t have high care costs.

We went on two expensive holidays, and I’ve fretted myself into conniption fits about the cost ever since. I’ve booked something nice for my 70th birthday next year, and am already scrimping to pay for it, even though I have more than enough money in the bank.

Okay lets break this down into parts!
So decorations: you can make some wonderful decorations yourself, there's loads of fabulous craft ideas out there at the moment, think of it as a halfway house! You can buy a cheap pack of coloured paper and make paper chains and put them up and start there. Its a toe dip!

Presents:
Agree with the poster above, try to think of it like you are buying the person something they will need and re-use repeatedly, its just that you are spending a bit extra so that its new and 'special' to them. So yes, £45 on a jumper. But he might have that jumper for 10 years and wear it 50 times a year! And he will love that you picked it out for him. Same with the cat toy - you are making an animal happy! Try and focus more on the outcome than on the outlay. But be gentle with yourself - if it feels too much, shop around, have a look on Vinted etc. Then sit and have a think about it.

Would it help for you to figure out an overall 'budget' for christmas and then work out how you are going to fit things into that budget - so in the past you might have had £50 extra for food and jam ingredients, so you planned what you were going to buy where accordingly, except now you can spend £400 or whatever. So its familiar territory, but with one step in the right direction sort of thing.

Meet yourself halfway, is the point im making - its not silly to need to ease yourself into it!

I'm the same OP. It's taken me a long time to get out of the habit of thinking about every penny.

I will never be a frivolous spender, but I now think about the value of what I'm buying.

I wouldn't buy a Christmas cushion from Next for example, because we have a collection of homemade decorations I treasure more.
But if I could afford £45 on a jumper and I knew my Dad would love it, then I would buy it. I wouldn't buy it "just because".

I think the secret is to buy one thing at a time. the next thing is easier :)

We are very comfortable financially but I don’t like waste or buying too much new stuff all the time. So I buy a lot second hand from Vinted and Depop. A lot of stuff is nearly new or even brand new with tags. Facebook marketplace is also good. Might make you feel better buying second hand, even just to start off with

You are totally out of sync of the reality of what things cost now.

You need to just immerse yourself in shops and then the prices will seem more normal.

Another way to do it is to allocate £x.to a spending pot and that way you now it's capped.

Buy the jumper! Start there. Will be nice to buy someone you love a gift, no? I think the only way to change your ways will be to actually start buying things. You don't have to be excessive, or buy things for the sake of it... but not buying proper presents for your loved ones seems incredibly tight if you can now afford it.

If i struggle with a price i think how much will i wear or use it .Those decorations may seem expensive now but you will use them for years if your dad wears jumpers like that he will gets lots of use out of it . If you still cannot bring yourself to spend it try charity shops or the sales after christmas just to get use to buying things.

£45 is not that expensive for a jumper. I think you need to adjust your expectations.

My experience OP is that I was brought up in a home where money was always in short supply - my father had a good job but he was supporting a family of 5 on his income and my mother was absolutely rubbish at budgeting . We got by with short term loans at the end of the month from my gran and there were never ending arguments about money.

So throughout my adult life I have always been very economical. Looking for the bargains and feeling guilty about spending money on myself. It's how my upbringing conditioned me to be.

I'm not wealthy now but I have savings and money to spare. But as you are finding I find it difficult to spend it.
So I empathise with your experience.