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Despite more people dipping into savings to pay for the escalating cost of essentials many people will continue to save regularly, Chelsea Building Society said.

Chelsea Building Society conducted an online survey of 1050 customers and found that the credit crunch is hitting home, with many people now having to use savings to pay for essentials such as food, utility bills, council tax and mortgage payments or rent in the last three months.

The research found that men are struggling the most with one in five saying they have recently resorted to using savings for essentials, compared to 13 per cent of women, and 15 per cent of men admitted to using savings to pay rent or a mortgage, compared to just 11 per cent of women.

While the respondents said they would be spending less on luxury items such as holidays, gifts, home furnishings and various other home improvements, they vowed to continue regular savings albeit in lower values than before.

Men’s average monthly savings will be down 24 per cent from £252 to £204, while women’s regular savings will decrease by 8 per cent from £181 to £168.

Darren Stevens, director of customer services for Chelsea Building Society, said: “It is encouraging that people have not been deterred from saving all together.

“While times may seem tough for some, it is still vital that people continue in their habit of putting some money aside for long-term savings.

“With sensible budgeting and cutting back on life’s luxuries, any money saved can act as a cushion against any unexpected costs in the future.”