Consumers ’embrace rewards to save money’

Savvy consumers will save £1 in every £25 spent by turning to rewards, vouchers and buy one get one free deals.

A new study by American Express, which was conducted by the Centre for Economics and Business Research, highlights the extent to which people are going out of their way to save money as they seek to avoid falling into debt.

Throughout the course of 2013, Britons are expected to save an average of £742, as 90 per cent are redeeming rewards at least once every month.

The findings highlight how individuals appreciate the need to tighten their belts as they face a rise in living expenses at a time when the majority of people have incurred below average pay increases.

Heather Laverne, vice president of consumer cards UK at American Express, said: "It's fair to say that rewards and special offers have grown in popularity during the economic downturn but they are now very much part of our everyday shopping experience, helping consumers budget and better manage their finances."

In terms of balancing household expenditure, 17 per cent of consumers admitted reward points are used for "incidental and unexpected" spending, while 11 per cent treat vouchers as a rainy day fund.

While it is good to see a degree of responsibility being shown, Britons would be much better off building up a cash surplus for unforeseen circumstances – best practice is to have three months' wages set aside.

The study also revealed the average UK adult spends £70 a week on recreation and culture, compared to just £22 – in today's prices – some 50 years ago. 

Christmas is a time of year when consumers need to be particularly careful, as it is very easy to run up massive debts by overspending. This is why people need to draw up a budget and stick to it during the festive period. 

By Amy White