A growing number of people in the UK have raided their savings and cut back on spending to clear credit card debts, research showed last Friday.

A survey of 1,300 adults by ING Direct showed that average savings fell by around £100 to £1,684 (€1,921) in the first few months of the year.

Higher inflation and VAT, fuel price rises, falling wages and high unemployment had led people to stop using credit cards as much, said the report.

Richard Doe, chief executive of ING Direct, said: “Since we began tracking the financial behaviour of ordinary Britons in 2009, consumers have been juggling with spending, paying off debt and putting money away for a rainy day.

“While many have reduced their debts, often at the expense of spending and saving, others continue to rely on their credit cards.

“However, the report demonstrates that there is a determination among the public to further reduce debts and rebuild savings, with the latter a growing priority. But in the current environment it may prove difficult for consumers to realise both of these aims.”

ING senior economist James Knightley added: “The economic headwinds battering the household sector are not relenting.

“With food prices going up and utility bills set to increase sharply, household finances will remain strained.

“This suggests that savings are likely to be run down further this year.”

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.