Job security fears knock consumer confidence

Just under a third of people said they expected the economy to deteriorate further during 2010, up from only 22 per cent who felt this way in the three months to the end of September.

There was also a sharp drop in the number of people who were optimistic that the economic situation would improve, with this falling to 39 per cent during the final quarter, down from 52 per cent, according to the Association of British Insurers.

The group said the number of people who were worried about their jobs also increased during the period, with 31 per cent saying they were now more concerned about their job security than they had been three months ago, up from 27 per cent in the third quarter.

Consumers' increased pessimism has led to a rise in the number of people who are focusing on paying off credit card and loan debts, with 42 per cent saying they were trying to clear their unsecured debt more quickly, up from 34 per cent a year earlier.

Among those who are saving regularly, only 17 per cent expect to be setting aside more during 2010 than they did last year.