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72 per cent of households to cut spending this year

Axa says that 72 per cent of households with a total income of £30,000 or higher will be cutting their spending and many will be forced to get a second job due to the credit crisis.

Axa has launched a Financial Task Force to tackle the problems faced by middle Britain during the financial turmoil.

The Task Force is a group of economists, psychologists and industry experts whose role is to define the specific financial problems of middle Britain.

A poll of nearly 6,000 people found that 15 per cent of more affluent households have been forced to get a second job or to send a non-working member of the household out to work.

Around one in five high earners will either stop saving or will reduce their pension contributions as concerns over the credit crunch hit home.

Around 8 per cent of households earning over £30,000 are considering not renewing protection insurance to cut costs, meaning as many as 1.1m households could go without life insurance or critical illness cover this year.

The Axa figures also showed that 44 per cent said they will be eating out less to cut costs, while around one in five said they would socialise less with friends.

The Task Force aims to propose ways to overcome the financial problems facing middle Britain over the next 12 months.

Axa spokesman Steve Folkard says: “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.

“One of the biggest issues however is that many seemingly well off households lack the motivation to tackle their 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. The aim of the AXA Financial Task Force is to investigate the economic issues facing Middle Britain and to propose recommendations for overcoming the psychological barriers to changing behaviour.”


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