It didn't affect me much at all, actually. I was about seven or eight and said to my parents "Father Christmas isn't real, is he?" and they confessed. So I'd evidently got the idea by this time that it was just a story for fun, nothing to be taken very seriously.

My daughter is three and has heard about Father Christmas at nursery. I'm wondering how to pitch him to her. I think as a story for fun would be ideal, because she's very into stories for fun that she's nevertheless quite clear are just stories. She enjoys playing along extensively with stories (e.g., her toy dinosaurs talking to her and her to them) without breaking character, but she doesn't get confused between story and reality.

(I hope to bring this approach to religion as well. Reading a picture book of the Nativity to her - she'd grabbed it in a bookshop and talked her mum into buying it for her - I asked what each thing was and she said "That's an angel. It's a sort of fairy." Can't say fairer than that!)

Edit: It may be relevant that this was in Perth, Australia, where Christmas is in the middle of summer, it's frequently forty Celsius on Christmas Day and the insane English-descended people still eat a roast dinner and people typically live in single-storey houses conspicuously lacking in fireplaces and chimneys. The entire set of Christmas traditions is clearly a ridiculously ill-adapted transplant that you're supposed to enjoy playing along with for some reason. Now I'm living in London and we're likely to have a white Christmas and my back yard looks like a bloody Christmas card, so the stories seem slightly more plausible. The reindeer will still have problems with the Sky dish and Father Christmas will still have problems with getting into the central heating, though.