More than half (53%) of people say their finances have worsened over the past three months, according to a “wealth and wellbeing” survey.
Around two in five (43%) expect their finances to deteriorate over the coming three months, the survey of 4,000 people across the UK in June found.
LV=, which carried out the quarterly research, said the latest findings are the most negative since June 2020, when its survey started.
Six in 10 (61%) of people said their total monthly outgoings had increased over the previous three months.
And three in 10 (30%) said the amount they are saving had fallen in the past three months.
Millions of people say they are struggling financially and standards of living are falling across the country— Clive Bolton, LV=
Nearly six in 10 (58%) have seen an increase in their supermarket spending, while three in 10 (31%) are spending less money on socialising.
More than a third (36%) of UK adults surveyed described their financial situation as “struggling” – and LV= said this has increased each quarter over the past year.
Nearly two-fifths (38%) are worried about money, rising to 46% of 18 to 34-year-olds and 44% of parents with children aged 10 years old or under.
Clive Bolton, managing director of protection, savings and retirement at LV= said: “The results of the latest LV= Wealth and Wellbeing Monitor highlight how the finances of millions of people are being squeezed by the large rise in the cost of living.
“The indices for savings, financial outlook and outgoings are the worst recorded since we started surveying consumers during the coronavirus pandemic, and worse than in the dark days of Covid.
“Consumer sentiment had been steadily improving between spring and early autumn 2021 but the sharp rise in the cost of living has dented consumers’ confidence.
“Millions of people say they are struggling financially and standards of living are falling across the country.
“Rising energy prices are becoming a significant problem for many people, and many families with young children and low income households are struggling.”
A package of cost-of-living support measures will kick in in the days and months ahead.
More than eight million households will start to see cost-of-living payments hit their bank accounts on July 14.
From that date, a first instalment of £326 will start to be paid out to low-income households on benefits, the Department for Work and Pensions (DWP) previously announced.
The second portion of the one-off £650 payment will follow this autumn.
Pensioner households are also set to receive an extra £300 to help cover the rising cost of energy this winter, while people on disability benefits will receive an extra £150 payment in September.
From October, households will have £400 taken off energy bills.
The threshold for paying National Insurance (NI) was also raised to £12,570 this week, meaning many people will see an income boost in their July pay packets.
However, this follows a controversial 1.25 percentage point increase in NI earlier this year to pay for health and social care.
Commentators have also recently highlighted how frozen income tax thresholds are pushing more people into paying higher tax bills, as wages rise.
