A quarter of over 50s are spending less on food and clothing
Over a fifth are cutting back on debt re-payment due to energy bills
Expected Government measures to help the poorest people reduce their energy bills may not go far enough as Saga Home Insurance reveals that over a fifth of the population are cutting back on basic expenditure due to the recent increase in fuel prices. The latest study shows that 21% of the population have had to set aside money normally spent on buying bare essentials such as food and water, and paying off debts, to spend on increased energy bills.
In light of recent price hikes, customers are facing a difficult winter with household bills increasing and the overall cost of living predicted to rise by 9%**. The increases are affecting a range of people and not just energy companies' poorest customers. The impact also varies across the generations.
The over 50s are being hit by these rises with a quarter (24%) saying they will spend less on bare essentials, compared to a fifth (20%) of those under 50. The younger generation is instead cutting back on paying off debts first, a quarter (24%) saying this will be the first course of action. These statistics are extremely concerning given the current economic climate and the mounting debt incurred by many younger generations at University. Savings are also suffering, with a sixth of people (17%) reducing the money they put away and instead using it to pay energy bills.
Interestingly, Brits are more reluctant to cut back on the lighter side of life with less than one in ten (8%) saying they have reduced their number of luxuries and treats to fund energy bills.
The difference between the sexes is also apparent, with women willing to spend less on food and clothing to cover the cost of increased bills (25% women vs. 17% men) whilst men would be more keen to use the money to pay off debt (20% women vs. 22% men).
*Analysis carried out by Opinium Research on an online poll of 2,209 British adults between 17 th and 21 st July 2008.
** uSwitch figures 10th March 2008
For more information on Saga Home Insurance please visit www.saga.co.uk/home or call 0800 068 8719.