A survey by financial firm Axa estimates that 20 million people in the UK significantly reduced their spending in the first few months of 2011 on a wide range of items and activities including going to pubs and restaurants, car usage, food shopping and holidays.
Axa's Big Money Index survey of nearly 2,000 people shows a sharp drop in consumer confidence with those feeling "financially confident" dropping from 23 per cent to 16 per cent over the past 12 months across at a time when the economy is slowing, taxes and inflation rising and the coalition government's austerity plans start to bite.
Spending restraint was particularly evident among those in their 20s and 30s on low incomes with few financial assets and among young professionals of a similar age with no children hoping to move out of rented accommodation into their own homes.
The report shows that 40% of all consumers [20 million people] chose to go out less between January and March this year and nearly half [48%] of those in the most pessimistic group, young professionals. Among those on low incomes with few assets the proportion was even higher at 56%. And, as petrol prices climb ever higher, over a quarter [27%] are driving their cars less.
Millions of consumers are making economies in order to pay off their credit card debts but one in four are using their savings to fund everyday expenditure, particularly those on fixed incomes.
Some 20% of those surveyed said they now regretted some of the financial decisions they had taken before the 2008-09 recession with "nest builders" – people in their 30s and 40s with young families and large mortgages – being the most regretful.
More than half of those polled said they expected to have to pay for treatments on the NHS within the next three years, with only one in five consumers confident that the coalition's original health plans would make the NHS better. More than half said they wanted the 50% income tax bracket – introduced as an emergency measure by Alistair Darling during the last parliament – to become permanent.
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