Young are the nifty thrifties

Brits plan to save their way out of recession rather than spend, according to research from Abbey Savings. Against a backdrop of falling Bank of England interest rates and the VAT cut - the vast majority of consumers of all ages and in all regions are cutting back on their expenditure. In fact only one in eight consumers claim to have not altered their spending habits in an attempt to save money - as we enter a new age of thrift.

Reza Attar-Zadeh, Director of Savings and Investments at Abbey, commented: "In the current climate many people are determined to tighten their belts. It can be surprising how even making a few small changes to our way of living, such as buying a cheaper brand of food or ditching take-aways in favour of making something from scratch, can add up to hundreds or even thousands of pounds in savings over the course of a year."

The research examined what society was planning to cut back on across a whole range of different types of expenditure - including food, entertainment, holidays, financial services and travel. The key findings were:

Seven out of ten (69 per cent) have cut spending on food - for example by downshifting their brand choice in the supermarket, or choosing a cheaper supermarket - saving on average £17.10 each per week.

Half (46 per cent) have cut back on travel - for example by using the car less and walking or cycling more - saving on average £17.27 each per week.

Almost two thirds (61 per cent) have cut back on entertainment - for example by staying in rather than going out - saving on average £19.47 each per week.

Half (51 per cent) have changed holiday plans even choosing to stay at home and enjoy local days out - saving on average £229 each per year.

Over a third (35 per cent) have changed financial products to get better value services - for example taken advantage of a 0 per cent credit card - saving on average £139 each per year.

This means that Britons have reduced their spending by as much as £3,168 each in the last year.

Perhaps surprisingly, it is the youngsters that are embracing thrift the most. Those aged 18 to 34 are tightening their belts and doing more to reduce their expenditure, than the older generations. This age group has reduced its spending by as much as £3,599 in the last year - compared to those over 55 who say they have shaved £2,773 of their annual expenditure - a difference of £826.

According to Abbey Saving's research, food is the most common item people are likely to cut back on, no matter where they live. Across all regions of the UK, the top three ways of saving money are buying cheaper goods in the supermarket, followed by reducing the number of take-aways and restaurant meals.

When it comes to other cost cutting methods, such as reducing car travel or changing to a cheaper supermarket, discrepancies start to appear. For example, 40 per cent of people living in Midlands say that they are using their car less, followed by 38 per cent of people in Wales and the South West and 35 per cent of people in Scotland and Northern Ireland. By contrast, only 20 per cent of Londoners are looking to save money in this way.

Londoners do appear to be making the most of entertainment available on their doorstep with 31 per cent increasing their use of free services, such as libraries, museums and outdoor concerts. This compares to just 20 per cent of people using similar facilities in the North, Yorkshire and Humberside.

Abbey offers a range of competitive savings accounts for either regular monthly contributions or lump sum savings. These include:

Fixed Rate Monthly Saver - fixed interest rate of 4.50 per cent gross p.a./AER interest for 12 months provided customers pay in between £20 and £250 a month.

First Home Saver (Special Issue 1) - variable rate of 5.00 per cent gross p.a./AER. A deposit of between £100 and £5000 is required to open the account followed by monthly deposit of between £100 and £300. Maximum balance £50,000. No withdrawals permitted however customers can access their money at any time but will need to close the account. To qualify for the account you need to be aged between 16 and 35 and a first time buyer.

Super Saver - one-year fixed term savings offering a rate of 5.00 per cent gross p.a./AER fixed for one year provided you put the same amount or more into one of Abbey's capital guaranteed investments or other qualifying investment.

Super ISA - 4.25 per cent gross/AER (variable) for 13 months, when you put the same amount or more into one of Abbey's capital guaranteed investments or other qualifying investment.