Rising cost of living ‘a major cause for concern’

The rising cost of living is set to cause Britons the most concern in the next 12 months.

A poll by Gocompare.com asked UK adults about their financial worries and the hike in bills has emerged as a clear frontrunner. Some 36 per cent picked it out as their main issue for 2014, more than double the amount who selected any other option. 

The second most common concern was not being able to save enough, which was chosen by 13 per cent of respondents, followed by struggling to find work (ten per cent), mounting credit card debts (six per cent) and losing a job (five per cent).

The last statistic is particularly positive, as it demonstrates how people are starting to feel increasingly confident about their employment situation, which could be a sign that the economic recovery is gathering pace. 

Cutting back

Consumers are recognising that 2014 is going to be tough and so they are putting a plan in place to help them avoid racking up debts. For example, 47 per cent will look to save on their food shopping, while 26 per cent are targeting energy bills. 

A further 25 per cent are confident they can reduce their monthly outlay on TV, mobile, internet and home phone bills. Worryingly, 28 per cent of those questioned do not believe they can make any savings. However, it is important that households have an in-depth look at their financial situation to see if their outgoings can be reduced, even if it is only by a little. 

Claire Peate, Gocompare.com's customer insight manager, stated: "While there are signs of a growing confidence in these figures in terms of relatively few worries about job security or rising interest rates, it is clear that the squeeze on budgets is still being felt. Food and energy price inflation combined with static wages for many people mean it is the basic cost of living which remains at the forefront of people's concerns looking ahead.

"Ten minutes spent shopping around for the best deals on your outgoings could save you hundreds of pounds over the course of 2014 and give your finances a much needed boost."

The importance of a budget

Consumers should be creating a budget and sticking to it in order to guarantee they have enough money to pay for all of their bills. According to Gocompare.com, one-third of Britons are keen to sort out their financial behaviour in the coming 12 months, as they recognise just how important it is to keep on top of their situation.

While 21 per cent admitted they have given up on such new year's resolutions in the past before the end of January, this year should be different. When asked what their number one financial resolution was, reducing outgoings (38 per cent) emerged on top, followed by saving more (32 per cent) and getting out of debt (21 per cent). If individuals stick to these, they will be much better off in the long run.

By Joe White