Hard-up Brits 'To Tighten Their Belts'

Britons are increasingly being squeezed by the rising costs of goods and services, new research from Alliance & Leicester shows.

The firm unveiled a new study today which found that 34 per cent of adults are expecting to have less cash to spare over the next six months, a process which could lead them to risk being caught in a debt spiral. Moreover, a large majority (79 per cent) said that these tough financial times would be caused by rising food and utilities prices.

While this might cause concerns that the number of people in debt will rise sharply, Alliance & Leicester also found that many people are getting a tight grip on their finances: 55 per cent said that they had already "taken action" on the income squeeze. Of this group, 20 per cent had switched to a cheaper utility provider and 12 per cent have changed credit cards.

Others have gone still further: six per cent have taken on a second job in order to be in a better position to avoid debt and pay the bills, while a further five per cent have sold expensive items such as a car, jewellery, or even their home.

Emma Walkley at Alliance & Leicester said: "It is encouraging to see people are making positive changes to their spending and budgeting habits. This will hopefully stand them in good stead should they see their disposable income affected over the forthcoming months."

She added: "Taking advantage of the best financial deals on the market is always important, but more so in the current environment. We would advise people to take a good look at their finances and see how they can be improved. Often making simple changes like switching to a current account provider offering a better interest rate can make any belt-tightening feel a little bit easier."