Brits Facing Cuts in Food Spending
The consumer group found that many consumers are “clinging to the edge of a financial cliff” with savings at “rock bottom” and “sky high” personal debt levels.
As well as cutting back on food, people are foregoing other expenses such as holidays and going out. Six in 10 people are cutting back on holidays, while a similar number are socialising less than they used to in order to save money.
However Which? found that people are less likely to cut back on spending on broadband, mobile phones and TV subscriptions.
Which? said that a “shocking” number of people are being forced to take out new forms of debt -- such as payday loans -- just to make ends meet.
It said that households are more in debt than at any time since the 1980s, while the decline in real incomes is in line to be the steepest since the 1920s.
The average household debt -- excluding mortgages -- is around £5,000, Which? said. One in 10 households owe more than £20,000.
In a new survey into consumer attitudes, the consumer group found that half of all people would struggle to cope with an unexpected cost, such as a large bill, while a third are already finding it difficult to pay for everyday bills on their current incomes.
The findings are contained in Which?’s first Quarterly Consumer Report. The report is based on interviews with 2,000 adults. The research found that people spend an average of 3 hours and 15 minutes a week worrying about their finances.
Which? said that most Britons are struggling to save seven pence of every pound from their income, giving the U.K. a lower savings ratio than all European countries bar Latvia and Lithuania.
Richard Lloyd, executive director at Which?, said that many consumers are “clinging to the edge of a financial cliff.” “Shocking numbers of people say they are forced to take on new forms of debt just to make ends meet, and many more would not cope with unexpected shocks to their incomes or household bills,” said Lloyd.
He warned that consumers have too often been an “afterthought” in the government’s growth agenda.
Which?’s research found that trust in politicians is low. While 39% of people do not trust car salesmen, some 56% do not trust the government.
Meanwhile half of all people under the age of 30 run out of money every month.
People aged between 18-29 were found to have higher debts than any other age group. For every pound they earn, people in this age bracket owe 47 pence compared to a national average of 21 pence.
One in 10 young people admitted defaulting on a bill, while one in five have relied on loans from friends or family to get by in the last month.
Those in the lowest income bracket have the highest levels of debt. Which? found that people with annual household income of £12,376 or less owe 72 pence for every pound they earn.
Falling standards of living are having a negative impact on life satisfaction, with half of all Britons satisfied with their lives overall.
A similar proportion of people believe that the economy will get worse over the coming year.