Nearly three in five Brits will be forced to cut their holiday spending this year, according to research from pre-paid currency card provider FairFX.com.

Most people confessed they will have to slash how much they pay out overall on their time away, or at the very least reduce their expenditure while abroad over the year ahead.

Nearly one in 10 admitted the credit crunch and fear of recession had spooked them enough to cut how much they will spend on holiday. Also, despite decreases in the Bank of England Base Rate, consumers are still feeling the pinch. More than half plan to curb foreign expenditure because the cost of living is too much for them and outgoings have increased drastically.

Stephen Heath, chief executive of FairFX.com, said: “Brits have been forced to slash their holiday spending as the credit crunch and the hefty rise in the cost of living hits them hard in the pocket. Unless conditions change holidaymakers are planning to spend just £460 each on what should be the main break of the year.

“The survey also showed one in seven are planning to cut back as a result of the poor exchange rate and weak pound making travel more expensive. However, using a pre-paid currency card allows travellers to buy currency when rates are favourable and store them for later use. Savvy travellers should consider the benefits of using a currency card to ride out the volatility in the market and lock in great exchange rate deals.”