According to predictions from financial experts, the economic outlook for the UK is pretty bleak for at least the next twelve months, with high inflation, rising unemployment, high utility bills and high levels of personal debt on things like unsecured loans and credit cards.

A new survey, conducted by the Resolution Foundation, has shown that somewhere in the region of one third of the UK population intend to cut back on their spending over the course of this year, as almost a quarter of us expect our personal financial situation to get worse as the year progresses.

Back in October last year, a similar survey found that around 19 per cent were planning serious cut backs on their regular expenditure, however this figure has now increased to 32 per cent, as the gloomy financial outlook and post Christmas blues are forcing people to take stock of their finances and loan debts.

In the October survey, around 12 per cent of people said that repaying their personal loan and credit card debt was a priority for them. However this figure has now increased to 17 per cent of people who are reducing their credit card bills and overpaying on their loans.

At the same time, the number of people who are putting savings away on a regular basis to provide themselves with an emergency fund, has increased from 22 per cent back in October to 30 per cent now.

Gavin Kelly of the Resolution Foundation said “Families that are already hard pressed are preparing for yet another very tough year ahead, with a big rise in the numbers planning to cut back on spending as well as trying to save and reduce their loan debts.”

“Given this gloomy backdrop it’s a real worry that a new round of cuts to tax credits planned for April will further dampen the spending power of low to middle income families.”