Barbara has lost her wedding ring, whilst Jim is trying to earn a fortune through scratch cards. Elsewhere, Dave has an idea of an invention that he is hoping to pitch on Dragons' Den, Joe is looking for love, and there's a new neighbour causing havoc in the Royle household.

It's Christmas day at the Royles and Barbara is up to her eyes in it as Jim is out of action due to an unfortunate incident in the precinct. Dave and Denise are obviously feeling the recession the most and worry that Anthony's lavish gifts will eclipse their gift of a fridge magnet. Antony and his heavily pregnant girlfriend, Saskia, get a surprise delivery. Joe reminisces about a tipsy evening of naked wrestling in front of the fire with Bobby Carter while Cheryl recounts her romantic encounter in the local supermarket car park.

To celebrate their 50th wedding anniversary, Jim and Barbara go to Prestatyn, Denbighshire, Wales, to stay in a holiday caravan, along with Dave and Denise. With no television or chip pan, the holiday is a disaster and they decide to return home early.

Jim has the flu, and it's Comic Relief Night 2009. Antony comes to the house after raising £400 for Comic Relief by skydiving from a plane.

Denise, inspired byNigella Lawson, decides to cook Christmas dinner for the family this year. Denise and Dave invite Jim and Barbara over to their house for the day and Dave's parents Jocelyn and Dave Sr. are asked to join them, much to Jim's dismay.

It's Children in Need night and Barbara announces to Denise and Dave that Jim is being generous and donating some money, as Jim looks for some in his armchair.

A selection of guests are prompted to think of their personal recollections of episodes of the Royle Family. Features contributions from JK Rowling, Peter Kay and Johnny Vegas.

Denise and Dave are expecting baby number two while Antony – who has now separated from Emma – has a boy called Lewis. Nana has moved in with the Royles as she is now bedridden. Cheryl is on the look-out for a boyfriend. Nana's condition worsens and she dies. Denise has a baby girl and calls her Norma after Nana.

Baby David's first birthday comes around and the Royles' sit down for Christmas dinner. They are joined by Darren and Emma – who is having a baby – and her parents. Emma's father, Roger constantly boasts about his wealth, which annoys Jim. After they leave, Jim's mood is turned around when he receives a Christmas present of Sky TV.

The day of Baby David's christening has arrived. Everyone has gathered at the Royle house for the buffet Barbara has prepared, including Twiggy's new girlfriend, Michelle. Denise worries she has nothing to talk about with Baby David while Antony announces that he and Emma are getting married (leading Barbara and Jim to guess that Emma is pregnant).

Antony announces that he and Darren, the managers of their band, are going to London to find a record deal. Jim continues to pour scorn on their plans, while Nana contributes £3 to their trip.

Nana's old neighbour, Elsie, has died and Nana and Barbara have just returned from the funeral. Jim becomes annoyed with Nana as she fluctuates between mourning and planning to pilfer in Elsie's flat.

Jim and Twiggy decorate the dining area for Baby David's christening by scraping off the wallpaper. Dave is blackmailed into helping when he arrives. Meanwhile in the kitchen, Barbara is cooking bacon sandwiches for everyone whilst talking to Denise and Cheryl.

Baby David has stayed the night with Barbara and Jim so Denise and Dave could go to the pub for their anniversary. They arrive with hangovers. Meanwhile, Joe cut his hand while grating cheese for Cheryl.

Denise and Dave bring their newborn, Baby David, to visit his grandparents. Barbara is shocked that Denise is leaving all the work to Dave. Meanwhile, Antony brings Darren over, who was caught attempting to steal a fridge/freezer from his place of work.