More than a third of UK households are “financially distressed” and plan to cut back across most, if not all, of their non-essential spending, as low incomes and high debt levels leave little room for manoeuvre, according to a new report.
Around a quarter of households are deemed to be comfortable but cautious, meaning they are financially secure but will cut their spending as a precaution.
A further 25 per cent are “squeezed spenders” who recognise the need to cut back but generally prefer to borrow or dip into savings. And one in seven (14 per cent) is “financially immune”, with no plans to cut back.
Of those planning to cut back generally, more than a quarter (28 per cent) intend to do so across all areas of their spending, according to the research from Grant Thornton and Retail Economics.
Nearly a third (32 per cent) plan to make cuts across most of their spending, the survey of 2,000 people in May found.
The significant cutbacks in households’ non-essential spending will be made to help offset sharp rises in everyday living costs, such as food, fuel and energy bills, the report said.
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