The number of Britons planning to cut back spending has risen significantly since October with a third now saying they are reigning in the cash, according to a new survey.
The survey by the Resolution Foundation think tank found around a quarter (23%) of adults polled for it by Ipsos MORI expect their household finances to get worse in the next year, with those on low to middle incomes the most pessimistic.
According to the poll, one third of adults (32%) are now planning to cut back spending in the next year – compared to only 19% who said they would in a similar poll in October. The poorest households and those in full-time work are even more likely to say they will cut back (both 38%).
Those making monthly savings have jumped from only 1 in 5 in October (22%) to 30% now, rising to half of those on higher incomes. 17% overall now plan to reduce their personal debt, compared to 12% back in October.
The research also finds that:
– 30% said they spent less at Christmas this year than last year
– 1 in 5 (19%) cannot afford to go away on holiday this year.
Even in the context of this continued pessimism, the poll found some are still holding out for a pay rise: one quarter (25%) of those in work still say they expect to get a pay rise this year, rising to 32% of higher earners.
The news comes just before latest UK GDP figures are revealed on Wednesday.
Gavin Kelly, Chief Executive of the Resolution Foundation, said: “Families that are already hard pressed are preparing for yet another very tough year ahead, with a big rise in the numbers planning to cut back spending as well as trying to save and reduce their debts. Given this gloomy backdrop it’s a real worry that a new round of cuts to tax credits planned for April will further dampen the spending power of low to middle income families. The longer households cut back on spending, the longer it will be before we see real economic recovery.”