Recession fears cut spending

Middle Britain is curtailing its spending as fears of recession rises and budgets are being squeezed.

A poll by Axa reveals 72 per cent of British households with incomes over £30,000 are planning to cut back on spending.

Furthermore 15 per cent admit to planning to take a second job or making a non-working member of the household head out into the workplace.

One fifth of people admit to cutting pension contributions to help make ends meet, while eight per cent may ditch life insurance.

Figures from Prudential show the average person is now contributing £144.57 a month to their private or company pension schemes, compared with £279.38 a year ago.

AXA spokesperson Steve Folkard said: "It’s no wonder that households with above-average incomes are struggling to cope. A typical family in Middle Britain may have a higher than average income but millions are weighed down by high lifestyle costs and face tough choices as the strain on their finances takes its toll."

However, one of the biggest problems facing the more affluent is that they are failing to face up to problems.

"We’ve had it easy for so long and been happily spending without thinking of the consequences that now people aren’t sure what to do," Mr Folkard said.

“If we don’t tackle this issue this group are in for a wake-up call in retirement. A significant proportion of people who enjoy high incomes may now well find that things are a lot tougher later in life."

Reasons for cutting back on spending were mainly put down to rising debt costs and high house prices.