Many consumers are cutting back on luxuries in the current financial climate, it has been claimed.

Personal finance advice site Fool states that almost nine out of ten consumers (89 per cent) plan to decrease their spending on non-essential items in preparation for stormy financial weather ahead. With many analysts suggesting that the chances of recession may be on the increase, those with high levels of debt owed to a number of lenders might be well advised to investigate debt consolidation.

According to Fool, luxuries such as takeaways are likely to be the first to go when people look to limit their spending. Two-thirds (67 per cent) of the consumers that it surveyed for its research stated that they planned to cut back on curries and kebabs. Meanwhile, fewer spending sprees down the high street were also identified as a means of reining in spending by 67 per cent, while almost half (49 per cent) stated that they would curb money spent going on holiday.

Consumers who are already regretting having overspent on the finer things in life may find that they have a number of outstanding debts to address, for instance on credit cards, store cards and loans. When combined with utility bills and mortgage payments these problems can quickly seem insuperable, but a cheap consolidation loan can help to address the issue by combining a number of outstanding debts into a single monthly payment.

David Kuo, head of personal finance at Fool, comments on the study: “When the going gets tough, the tough get going and it’s reassuring to see that most of us are going to great lengths to cut non-essential spending from our budgets. During a recession, cash is king. And those with the leanest budgets will be best placed to not only survive the downturn but also generate cash.”

Other areas that British consumers have identified as potential money savers include stopping smoking (12 per cent), reducing spending on birthdays and Christmas and shaving back the sums spending on beauty products. Meanwhile, three per cent of consumers said they planned to ensure their children learnt the financial lesson as well by cutting down their pocket money.

“In order to enjoy jam tomorrow, we need to make sacrifices today, even if it means giving up the occasional Chinese takeaway,” Mr Kuo continued. “Downturns never last forever and the recovery will feel so much sweeter if you endure a bit of sourness now.”

In recent days, Fool expressed its disappointment at the fact that chancellor Darling has included little in his Budget encouraging UK households to budget or address their debts in preparation for any possible recession. The firm said that the savings ratio currently stands at two per cent compared to a historical average of eight per cent.

The assertion matches one recently made by Sainsbury’s Personal Finance which suggested that UK consumers are developing problems with saving. With current demands on their incomes increasing as a result of outstanding debts and bills, consumers are failing to put funds aside for later in life.

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