The rise in VAT that came into effect on January 4th will make seventy per cent of Britons reconsider making big purchases this year, according to new research from Gocompare.com.
The survey of 3,000 UK adults also shows that almost two thirds expect a very difficult year financially in 2011, with 22 per cent stating that the biggest financial worry in the new year will be the rising cost of living and bills.
Many people have already been delaying big purchases over the last 12 months. Over a quarter of people surveyed have avoided moving house, around a fifth have put off buying a car and nearly a third have decided against holidaying abroad. Job security in 2011 is also a big worry for a large proportion of the adult population, with 31 per cent stating that they fear losing their job or not being able to find enough work.
The rate of VAT, a tax on goods and services, is now at 20 per cent. Some items, including children’s clothes, food, newspapers and magazines are exempt from the tax. The government claims that the rise could raise as much as £13bn of public money.