Credit crunch hits home as millions cut back

Nearly one in six adults plans to cut spending, MoneyExpert.com research shows.

More than 26.3 million adults are planning to cut spending this year as worries about the credit crunch hit home in the real economy, new research* from MoneyExpert.com shows.

Around 57 per cent of adults will cut back over the next 12 months with many planning to reduce spending on basics such as the weekly food shopping bill, the independent financial comparison website says.

The study shows 23 per cent of people intend to reduce their food spending while 31 per cent will spend less on clothes and 32 per cent will reduce expenditure on going out and entertainment.

More than one in five will not have an overseas summer holiday this year and another 16 per cent won’t have a summer holiday at all. And 12 per cent will not buy a car as planned while six per cent will not move house as planned.

MoneyExpert.com is urging anyone who is struggling financially to get their borrowing under control and to commit to cutting debts.

Sean Gardner of 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."

Area of spending Percentage who plan to cut back
Will not have an overseas summer holiday 21%
Will not have a summer holiday 16%
Will not buy a car as planned 12%
Will not move house as planned 6%
Will not carry out home improvements 17%
Will cut weekly food shopping bill 23%
Will cut spending on going out/entertainment 32%
Will cut spending on clothes 31%
Other 4%

MoneyExpert.com offers a unique service which enables people to find the financial products which best meet their specific needs, and which they are more likely to be successful in being accepted for. It includes exclusive research conducted by MORI, which reveals providers’ service levels. This information is married up with a financial database which lists the products suited to the customer. For the first time, people can review a product’s price, features and also the level of service offered by the provider to enable them to make a more informed choice.

MoneyExpert.com aims to demystify the complex world of personal finance, and to help inform customers of the choices available. The service can be found at www.moneyexpert.com

* All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1,951 adults. Fieldwork was undertaken between 26th and 28th February 2008. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

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