N&P customers riding out the crunch

With upwardly spiralling gas and electricity bills, hefty food prices and panic at the petrol pumps, you would think that the effects of the credit crunch have really taken hold, but, according to a Norwich and Peterborough Building Society (N&P) survey, not everyone has drastically changed their spending habits - yet.

Many people have cut down on holidays, meals out and clothes shopping, but few have stopped enjoying life's luxuries altogether.

40% of those polled revealed they were considering taking fewer holidays in the wake of rising costs and 13% of people taking part in the survey would not be holidaying at all. However 44% said they were still planning to go on holiday just as much as they were a year ago.

When it comes to eating out, 14% of people had decided to stop spending in restaurants altogether, while 45% of people taking part in the survey said they had made the decision to afford fewer meals out. However, 36% of people in the poll said they were still eating out as much as they did 12 months ago.

Spending on luxuries such as clothes and shoes was also highlighted in the poll as an area where people were trying to cut down. Although noticeably it was the women who said they were not making so many purchases and the men who were still splashing out!
51% of women polled had tried to cut down on the amount of clothes and shoes they bought, compared to 40% of men, while 9% of women and 11% of men had stopped buying clothes altogether. Some 48% of men who took part in the survey said they were still spending on clothes as much as ever before, while only 36% of women said the same.

The N&P survey revealed that families are feeling the effects of soaring food and fuel prices the most, as almost 75% of people with children said they were spending more on gas, electricity, petrol/diesel and supermarket shopping. This is compared with 59% of people without dependent children.

But it seems that spending more on necessities has so far not affected people's ability to save money. While the survey revealed that only just over 8% of people polled were managing to save more this year than last year, it also found that nearly 40% were still able to put away as much money as they did 12 months ago and a further 30% were saving cash, although it was less than in previous years. 22% were not managing to save at all.

Just one quarter of those respondents who have a credit card said they were using it more this year in order to make ends meet, while just under 50% said their credit card spending has remained the same. The remaining quarter in the poll were taking steps to flex their plastic less often in the current climate.

Some respondents had tried other methods to manage their money better. For example, 27% of those taking part in the survey said they had started a household budgeting plan and 16% had resorted to finding extra work to boost their income. Over 37% said they had not made any changes to the way they looked after their money at all.

Norwich and Peterborough Building Society group product manager Gary Lacey said: "It is interesting that a large proportion of those who took part in our survey don't appear to be taking drastic measures with their finances just yet. However our figures do reveal that families are being affected more than most by rising costs.

"For those families with spare cash to save, an N&P Family Savings Account could help them afford those luxuries in life, such as a holiday or Christmas, or just a rainy day.

"Our range of Family Savings Accounts have been designed to help families make the most of their money. They offer a great rate with easy access, and can be opened with as little as £1."