Cash-strapped consumers are planning to cut the cost of holidays by staying with family and friends, it was disclosed today.

And it is the the over-65s who are most keen to rely on this free accommodation on their vacations, a survey by Post Office Travel Insurance found. Of the 2,024 adults questioned, 19 per cent of those with family and friends abroad intend to stay with them for holidays this year.

For the over-65s, this figure rises to 38 per cent. Other people are changing their holiday plans altogether to save on cash this summer.

About 12 per cent are planning to swap their holiday abroad for a stay in the UK.

Eight per cent are downgrading their usual standard of accommodation and six per cent are having shorter holidays.

Post Office travel insurance bosses said they had noticed people’s changing holiday habits as the recession began to bite.

The exchange rate, particularly for sterling against euros, was an added incentive to people to try to save money while on holiday and make limited funds go further.

Rachel Croft, Post Office travel insurance manager, said that with a mobile population many people knew of people living overseas or in the UK at places that would make a decent holiday destination.

She said: “Our research shows almost half the population have friends and family abroad so in these tough economic times, it’s understandable that holidaymakers are making the most of these networks to cut their costs.”

She added: “We often think of young people and backpackers staying on sofas or in spare rooms for cheaper holidays, but our research shows that it’s actually the older generation that are leading the trend.”

The news comes at a time when more families are deciding not to go on a break this year and are instead staying at home or ‘staycationing’.

Many families are deciding to forego a foreign holiday and are instead deciding to have holidays at home and go on family days out.

Sales of camping and caravan equipment have rocketed in recent months as people who still want to go on a break attempt to do so within their more limited budgets.