The proportion of people struggling to get their finances on track remains concerningly high, according to Which? The consumer group said January tends to be a month when people are particularly grappling with their debts, as bills from Christmas pile up.
But this year the numbers struggling have remained high in February and March, according to the Which? consumer insight tracker. A survey by Yonder of more than 2,000 people for Which? in March indicated that 8.8% of households missed or defaulted on a payment in March, as did 8.2% and 8.1% in January and February.
The research was released ahead of hikes to some household bills, including those for broadband and mobile phones, water and council tax. Which? said its findings underline the need for the Government and companies in essential sectors to support the most financially vulnerable.
A range of cost-of-living support is available. People can visit the helpforhouseholds.campaign.gov.uk for more information. As part of the support being given, millions of households across the UK will automatically receive a £301 payment from the Department for Work and Pensions (DWP) between April 25 and May 17.
The payment reference for bank accounts will be “DWP COLP”, along with the claimant’s national insurance number. It is the first of three payments, totalling up to £900, for those eligible and on means-tested benefits, such as universal credit or pension credit, in 2023/24.
Which? said six in 10 (60%) households surveyed in March had reported making at least one adjustment to cover their essential spending, such as utility bills, housing costs, groceries, school supplies and medicines in the previous month. Adjustments included cutting back on essentials, dipping into savings, selling possessions or borrowing. This is consistent with the level seen for the past few months, Which? said.
A 51-year-old man from the south-east of England told Which?’s survey: “It is a struggle to pay bills and afford food. There is no money for anything but the essentials and sometimes not even enough for those. This is making me miserable all the time and making my mental health even worse.”
Subscribe here for the latest news where you live
A 40-year-old woman from Scotland said: “I am anxious about the future and struggling to pay upcoming bills.” A 73-year-old woman from Northern Ireland said she was: “Finding it difficult to heat the home, buy food and pay bills.”
And a 49-year-old man from the south-west of England said: “I’m finding that I am spending more than I have incoming. I’ve had to put some bills on hold and have had to cut my spending on groceries. I’m also borrowing from family from time-to-time.”
More positively, the research indicated that consumer confidence appears to be recovering slightly. A fifth (21%) of those surveyed believe the UK economy will improve over the next 12 months, while 54% think it will get worse, while the remainder were neutral or said they did not know.
This gave a net confidence reading in the future economy of minus 33. While this is a negative reading, it is an improvement compared with a net reading of minus 68 recorded six months ago, Which? said.
The consumer group said measures including extending the energy price guarantee at its current level are important steps. The Government recently confirmed that the energy price guarantee limiting typical bills at £2,500 a year, will be extended for households for another three months, from April to June.
Which? wants businesses providing essentials to ensure that they help people as much as possible during the cost-of-living crisis. For consumers struggling to make payments, there is support available, Which? said. Lenders or landlords may be able to help with a plan to make the costs more manageable for homeowners or renters.
Rocio Concha, Which? director of policy and advocacy, said: “Our research suggests millions of households are struggling to get their finances on track amid huge pressure on the cost of living. This should set off alarm bells, particularly as painful increases to many essential bills are due to take effect in a matter of days.
“Our findings underline the need for the Government and companies in essential sectors – such as supermarkets, energy and telecoms providers – to do everything in their power to support consumers, particularly those struggling financially, through this incredibly difficult time.”
