Money News

UK officially in recession – survival tips

Monday, 26 January 2009

Writes Hazel Cottrell
hazel.cottrell@consumerchoices.co.uk

It’s more crucial than ever to ensure you’re on top of your finances, now that Britain is officially in recession.

The UK is in recession for the first time since 1991, figures from the Office of National Statistics confirmed on Friday.

Gross domestic product fell by 1.5% in the last three months of 2008, the worst performance in more than 28 years.

This followed a fall of 0.6% in the previous quarter, which meant the figures met the definition of a recession - two consecutive quarters of negative growth.

The recession in Britain has been seen as practically inevitable in recent months as the financial crisis has escalated, resulting in increased unemployment, the death of several high profile retailers and a freeze on lending.

Chancellor Alistair Darling said the downturn was “sharper than many people believed.”

Shadow chancellor George Osbourne told Sky News: “I think we are facing an exceptionally difficult time and unfortunately the figures that have just come out today confirm this is now going to be the worst recession for a generation.”

Chris Eagle, commercial manager at CreditChoices.co.uk says: “This recession is going to be tough, but we can get through it. To ensure you come out the other side without your financial health taking a complete battering, it’s essential to get your finances in shape.”

To beat the recession you should try to do the following:

• Cut your debts – Ensure you are paying the lowest rate on your borrowing and try to pay more than the minimum repayments each month.
• Spend less – Think carefully about all your purchases and remember that making small sacrifices now could leave you much better off in the long term.
• Reduce your bills – Make sure you are on the cheapest tariffs for your gas and electricity, mobile phone and broadband. Switching these could save you £100s.
• Save if you can – With the future looking uncertain, building up a rainy day fund is definitely a good idea.

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