Some 70 per cent of consumers are rethinking major purchases planned for next year because of the impending increase in VAT, according to new research.
A poll of 3,000 adults by Gocompare.com found that many have already delayed buying big-ticket items like a new car or a home because their finances are under pressure.
The majority of respondents indicated the rise in VAT from 17.5 per cent to 20 per cent from January 4th will have a further impact on their spending habits.
Worries over job security are adding to concerns about the tax hike, with 31 per cent of respondents fearing they will either be made redundant or unable to find enough work next year.
Commenting on the research, Gocompare.com business development director John Miles said the true cost of the 2.5 per cent increase in VAT will be "rather small" in reality.
Nevertheless, coming as it does at a time when people are anxious about the outlook for employment and the cost of living, it will contribute to making finances "a big worry for large swathes of the population".
In related news, Santander recently said that some 13.75 million people are expected to bring forward major purchases to beat the VAT hike.
These consumers are expected to spend a total of £8.9 billion before January 4th.
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