Consumers look to rein in spending as cuts start to bite

CONSUMERS are planning to cut back on spending next year – with many saying they are concerned about increases in the cost of living and rising bills.

High energy prices and the rising cost of food are among the greatest concerns as people look into the new year. Many people are also looking to cut back on spending to avoid getting into debt.

A survey commissioned by Gocompare.com found the rising cost of living was the biggest financial worry for 2013, with 42 per cent of respondents concerned about higher costs. More than one in six people (64 per cent) expect 2013 to be a very difficult year financially.

Food shopping is one of the areas where people plan to cut back by buying cheaper items or buying less. Almost four out of ten (37 per cent) said cutting back on food bills was one of the areas where they believed they could save money.

Shopping around for cheaper phone and internet deals or cutting back on television packages was also an area where people (26 per cent) said they believed they could save money.

About one in five (21 per cent) said they would be looking at ways to cut the cost of household fuel bills by changing their supplier or trying to use less energy. Almost one in five (18 per cent) said they would be trying to use their cars less or trying to spend less money on travel.

A spokesperson for consumer group Which? said it was no surprise that people were thinking of cutting back. “Which? research shows that ten million households – more than a third of the population in the UK – are feeling the financial squeeze.

“With consumer confidence remaining low, the government has a job on its hands to convince people that everything possible is being done to keep unavoidable costs like energy and food bills under control.

“We’re looking for further progress in reforming the energy market, an end to misleading food price promotions and more competition in banking to take some of the pressure off hard-pressed consumers.”

Which? has long encouraged consumers to shop around for the best deals to make their money go further.

This message is also promoted by price comparison websites, which help consumers to seek out the cheapest deals. John Miles, Gocompare.com’s business development director said: “Without doubt, 2013 will be a tough year for many people as austerity measures continue to bite.

“Using a comparison site like Gocompare.com can help stretch your household finances by making it easy to compare a wide range of products and services from car insurance, mortgages, utility bills to credit cards and mobile phone deals.

“Providers constantly review their pricing, so even if you think you’re getting a good deal on your financial products at the moment; it is worth shopping around on a regular basis.

“Ten minutes spent shopping around online for the best deals on your outgoings could save you hundreds of pounds, giving your household budget a much needed boost.”

Gocompare.com claims that by using its services, consumers save, on average, £391.51 on their car insurance, £125.66 on their home insurance, and could save up to £350.95 on their gas and electricity alone.