The credit crisis is rapidly becoming a reality, as new research from MoneyExpert.com reveals that 26.3 million Britons intend to tighten the reins on their spending.
The study shows that as many as 57 per cent of UK adults will cut back over the next 12 months. Recent hikes in the cost of living such as the price of food and energy bills mean that many Britons intend to curb their spending on the bare necessities, not just luxury items.
As many as 23 per cent of participants said they plan to reduce the amount they spend on food. However, the majority of people questioned aimed to cut back on non essential spending, with 31 per cent stating they would spend less on clothes shopping sprees and 32 per cent opting to spend less on entertainment and going out.
The study also shows that more than one in five Brits will be sacrificing an overseas holiday and 16 per cent will be forgoing any form of summer holiday at all. According to MoneyExpert.com, the cut backs show that UK adults are taking the current credit crunch seriously and intend to do what they can to survive it.
In the wake of its research and recent financial instability, MoneyExpert.com emphasised the importance for those who find themselves struggling financially to get their borrowing under control and commit to cutting debts. Sean Gardner from MoneyExpert.com, said:
"The credit crunch is moving on from being something that just affects bankers to having real effects on real people in the real economy.
"There is however a risk that we could talk ourselves into a recession by panicking unnecessarily. Certainly anyone who is struggling financially should be taking action but that has always been the case.
"There are still plenty of good deals out there and people with good credit records still have plenty of choice. There’s no need to panic." Mr. Gardner concluded.
The active curbing of spending by UK adults coincides with recent research from Moneysupermarket.com, which found that five out of six Britons are concerned about their finances.
Gone are the happy go lucky days of easy credit, it seems the nation is suffering with a financial hangover as 84 per cent of participants confessed to having real financial worries.
According to Moneysupermarket.com, UK consumers owe over £1.3 trillion on loans
, credit cards and overdrafts, all of which are subject to rate and availability changes as a result of the credit crunch.
Many Britons are struggling to meet their repayments, and as they rise, as many as 30 per cent of people questioned feared they would not be able to cope for much longer.
Tim Moss, head of loans and debt at Moneysupermarket.com, said: "Just 16 per cent of Brits said they had no financial worries, indicating people from all walks of life and income levels are feeling the pinch from rising bills and taxes.
"Anyone starting to worry about their financial situation shouldn’t bury their head in the sand – problems are easier to tackle when addressed early." Mr. Moss concluded.
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