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Middle incomes plan spending cuts

Middle-income families are cutting their spending and taking on second jobs in an attempt to ease the financial strain they are under. About seven in 10 of households earning £30,000 or more a year say they will take steps to cut their spending this year, according to insurer AXA.

At the same time, 15% say they will either be forced to get a second job or send a member of the family currently without one out to work to make ends meet. One in five will also stop saving or cut their pension contributions, with 30% claiming they do not have enough money left at the end of the month to save. Meanwhile, 15% blame their cashflow problems on high house prices - and the same proportion blame them on debts.

About 44% plan to eat out less, 21% will cut back on socialising and 8% are considering not renewing insurance cover.

AXA said the survey shows the extent of the difficulties faced by people on above-average incomes. It said middle class inflation, which takes into account the goods and services typically bought by middle-income families, is running at 5.7% at a time when income growth is slow.

AXA’s Steve Folkard said: “It’s no wonder that households with above-average incomes are struggling to cope. “A typical family in Middle Britain may have a higher than average income but millions are weighed down by high lifestyle costs and face tough choices as the strain on their finances takes its toll.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .