As many as 20 million people have been forced to make cuts to their daily spending so far this year, according to a new report.

The Big Money Index from AXA shows that two-fifths of Britons have reduced expenditure to ensure they live within their means, with financial confidence falling to 16 per cent in the first quarter of 2011 from 23 per cent in the same period last year.

Some of the main areas in which consumers have made cutbacks include going out, with 40 per cent of respondents slashing spending in this regard in the first three months of this year, as well as holidays, car usage and takeaways and alcohol.

The research could have an impact on businesses' marketing campaigns - which may include the use of the right promotional labels - as they look to attract shoppers who are spending less and less on non-essentials.

Eric Lhomond, chief investment officer for AXA UK, remarked: "These figures reveal a concerted effort by British consumers to claw back some financial security in the face of a significant drop in optimism that we found across all demographic groups."

The index comes after a poll by moneysupermarket.com revealed almost one-third of Britons are at the point where an increase of less than £100 in their monthly outgoings would result in not having enough money to meet their day-to-day living costs.

Denny Bros Ltd, 14 June 2011