Consumers cutting back as costs crisis bites

More than half of people are reducing their energy use and nearly a third plan to cut back on essentials such as food and clothing as the cost of living crisis bites, a survey has found.

Building Societies Association (BSA) data shows that 54% of people are turning down the thermostat and turning off lights, 31% plan to cut back on essentials such as food and clothing, 51% are cutting back on nights out and 41% are shopping around for better prices.

Some six per cent of homeowners said they are worried about paying their mortgage, while 24% of people who are not homeowners are worried about paying housing costs, according to the survey of more than 2,000 people earlier this month.

A fifth of people are putting off bigger purchases like cars, household items and holidays, and 21% aim to use their savings to deal with rising costs.

Paul Broadhead, who is the head of mortgage and housing policy at the BSA, said: "Whilst it's encouraging that fewer than one in 10 homeowners are concerned about keeping up with their mortgage payments, this is likely to be because it will take time for bank rate rises to be felt by most borrowers, as around 80% of them are on fixed rates.

"Borrowers must however start planning for when their mortgage deal ends, as whilst the impact is likely to be quite modest, any increase in expenditure in the current environment will be unwelcome."

The research also found confidence in the housing market has declined – with the number of people who think now is a good time to buy a home falling to 16%, its lowest level since 2008.