Two-thirds of people asked in a poll by personal finance lender Nationwide said this was a bad time to buy major items such as a car or home.
The Nationwide’s latest consumer confidence index fell by 11 points to 51, the biggest drop since it started in 2004.
Of those polled, 85% believed the economic outlook will be the same or worse in six months' time.
Car finance lender Halifax has reacted to the downturn by closing 53 branches in its estate agency division.
Bank of England deputy governor Charles Bean said the global financial slowdown was at least as bad as in the 1970s and could "drag on for some considerable time”.
But Bean said growth should pick up and inflation fall next year, if oil prices and credit markets stabilised.
Figures from the Office for National Statistics showed no growth between the first and second quarter of 2008, ending a run of more than 15 years of consecutive growth.
Bank of England governor Mervyn King does not expect the UK economy to grow soon and does not rule out a recession.