Research commissioned by Axa found a third of Britons would pay off debt using money saved from tax cuts, while 17 per cent said they would spend it socialising in bars and restaurants. Forty nine per cent of those surveyed would use the money to pay for day-to-day living expenses, such as food and fuel bills.
Axa head of pensions and savings policy Steve Folkard says: “Worries about the state of the economy and job security in 2009 would lead many Britons to take advantage of a tax cut by shoring up their finances, reducing their debts or increasing savings. Britons are waking up to a new financial reality and are adopting a more responsible attitude to their financial security.”
However, while Folkard points out that tax cuts may not “deliver the expected stimulus to the economy through increased consumer spending”, the study says the Government will need to cut the tax bill for an average British family by at least £1,000 next year to “help avert a severe recession”.