Cost of Living Crisis: Britons Slash Heating and Food Spend as Poverty Concerns Grow
Cost of Living Crisis: Britons Slash Heating and Food Spend as Poverty Concerns GrowReuters

The number of British people worried about making ends meet has risen for the first time since 2011 and has subsequently led to a slash in the amount of money spent on heating and food.

According to market researcher Nielsen, 60% of Britons are actively looking to reduce their energy bills while more than half of the survey respondents say they are switching to cheaper brands at the supermarket to reduce their food costs.

The survey results also show that Britons are shying away from luxuries after 57% said that they have cut out takeaways altogether.

"British consumers are increasingly recognising improvements in the economy, but they are still cautious and likely to continue to modify their buying and consumption habits to save money," said Chris Morley, managing director of Nielsen UK and Ireland.

"This is in stark contrast to confidence levels in Germany, for example, where consumer cost-cutting is almost half the level it is here."

On 21 January, the International Monetary Fund said Britain's economic recovery will be even stronger than thought during 2014.

The IMF said the UK economy would grow by 2.4% across the year, up from its previous estimate of 1.9% and the biggest increase of any country in the world. Growth will then slow slightly to 2.2% in 2015.

However, real wages in the UK have been falling consistently since 2010, the longest such period since at least 1964.

According to the Office for National Statistics (ONS), the fall in worker productivity in 2008 and 2009 may account for the dramatic drop in take-home pay and has therefore hit household budgets.

Meanwhile, according to a survey of 1,001 Britons by PR agency Edelman for its 14th annual trust and credibility report, more than eight in 10, do not expect to be better off in 2014 despite the gathering pace of the UK's economic recovery.

A mere 12% thought they would be in a better financial position, despite hype from Chancellor George Osborne that he had put the UK firmly on the path to prosperity with his tough austerity programme of public spending cuts to clear the Treasury's deficit.

Elsewhere the Institute for Fiscal Studies (IFS) said that British households have seen a significant squeeze in take-home pay since 2008 as real median household incomes in 2013/14 were more than 6% less than before the economic crisis hit.