The study - from insurance group Aviva - says that families have been forced to 'ruthlessly' change their lifestyle and spending habits and are splashing out only on the essentials.
The report states that belt-tightening families are 'ruthlessly removing luxuries from budgets to not only make ends meet but also provide additional security in the form of savings.'
It found that one in five people do not spend anything on personal items like cosmetics or 'non-essential' toiletries like bubble bath.
Nearly 40 per cent of families spend nothing on leisure, while 25 per cent avoid holidays or entertainment such as going to the cinema.
More than half of those polled also said they are spending nothing at all on children's activities, like swimming or piano lessons.
Does this resonate with you?
Have you cut back to all but the most essential of spending?