Almost half (42%) of Financial Planners surveyed by the Personal Finance Society (PFS) said they had seen clients reducing their spending.

A further 37% had seen clients pull cash out of their savings to cope with increased costs and 8% had seen increased borrowing to keep going in the current economic climate.

Planners surveyed also saw an increase in the number of consumers shopping around for deals as average wages failed to keep pace with inflation.

One in five members of the PFS parent body, the Chartered Insurance Institute (CII), said they had seen clients reduce their protection cover to cut their costs, with 18% allowing policies to lapse.

Matthew Connell, director of policy and public affairs at the CII, said: “Many consumers have never seen costs increase at this speed. With such a significant reduction in disposable income it makes sense to act now to ensure your finances are in the best shape possible. But taking a good, hard look at your finances rather than just spending less is essential in the current climate.

“Increasing debt levels or cutting back on insurance cover today could cause consumers more serious problems in the future and compromise their future financial resilience. Financial Planners can help consumers review their lifestyle, face today's cost of living challenges and future proof their finances.”

• The PFS surveyed 723 Financial Planners and insurance professionals in June via social media.