VAT Increase To Deter Big Purchases In 2011

Seven out of ten Brits will reconsider making large purchases in 2011 because of the 2.5% hike in VAT that will take effect from 4th January.

In a survey conducted by GoCompare.com nearly two thirds of the 3000 adults questioned said that they were expecting 2011 to be difficult for personal finances.

The rising cost of living and escalating fuel prices are worrying more than 20% of people in the survey.

These concerns, coupled with the impending 2.5% in VAT, are forcing many to rethink their plans to make large purchases such as buying a car or incurring the costs of moving house in 2011.

This is likely to impact on the property market which many experts are predicting to show falls of around 5% during 2011.

“It looks like many of us will be tightening our belts even further in 2011 as money woes continue into the new year”, says John Miles, business development director at Gocompare.com.

“While the VAT increase can’t be avoided, people can take control of their finances by making sure they aren’t paying more than they need to for things like car insurance, home insurance and energy. You can choose who you buy these essential services from, and it’s important to shop around to get the best deal for you.”, he advises.