People braced for more budget squeeze in 2014

Despite recent signs of improving consumer confidence and better news about the economy, 49 per cent of more than 2,000 people surveyed in December predict their finances will come under increased pressure next year.

Less than a third (29 per cent) expect their family’s financial situation to improve in 2014 – and after a string of price rise announcements by energy firms, 60 per cent of consumers said they are already “dreading” the cost of their winter fuel bill.

The research also found that 25 per cent of people could only afford to pay for Christmas by borrowing. One third (34 per cent) dipped into their savings, taking out an average of £450.

Three quarters (76 per cent) of those borrowing money put it towards presents, with 44 per cent also using credit to pay for food over Christmas.

Which? found that 30- to 49-year-olds used more credit than other age groups, with those who borrowed taking on debts of around £490 to pay for Christmas compared with the average £350.

They were also more likely to have dipped into their savings and those in this age group who did took out an average of £570. This age group also felt most under pressure financially, with 41% saying they felt squeezed.

Richard Lloyd, Which? executive director said: “We want a New Year resolution from the Government to do more to help hard-pressed consumers by getting a grip on the cost of essential bills.”