Nearly a third of consumers believe the economy will worsen in 2010, research by the Association of British Insurers (ABI) suggests.
One in three (31%) predict further hardships in the year ahead according to figures from the last quarter of 2009, up from 22% in the previous quarter.
Fewer were optimistic about future prospects towards the end of 2009 than earlier in the year. Only 39% were positive about the economy in 2010, down from 52% who felt the same in the third quarter.
Increased fears over job security are likely a key factor in the drop in consumer confidence, says the ABI.
Of those asked, 31% said they were more worried about their job security than three months ago, up from 27% in the previous quarter.
The ABI's Savings and Protection survey for Q4 2009 asked 2,500 adults their views on the economy, and how it affected their attitudes to saving and protection.
The results suggest paying off debts is taking precedence over saving, with 42% of respondents upping repayment of non-mortgage debt, an increase from 34% a year ago.
Of those saving regularly, only 17% expect to be saving more in 2010, down from 24% who felt the same way in the previous quarter.
Yet despite their forecasted habits, more people see themselves as savers than spenders, with 37% believing they are savers compared with 31% as spenders.
Less than 20% say they would rather get into debt than go without, the survey suggests.
Dr Rebecca Driver, the ABI's director of research and chief Economist, says: "Despite continued fiscal and monetary policy intervention, consumer perceptions of the economic prospects and their own job security in 2010 have deteriorated.
"These findings highlight how important it is for any government to deliver policies that appeal to consumers' increasing sense of financial responsibility, helping more people become financially independent by increasing saving as well as reducing debt."
