A new study has found that most Brits are burying their heads in the sand over the impact of the cost-of-living crisis on their household finances. Two-thirds of households currently believe that the cost-of-living crisis will cost them no more than £1,000. But experts predict a typical household will see increases at least three times higher than that.
A third of households surveyed expect their household bills will only rise by £500 in the coming year, according to research by cost-of-living champions Nous.co, a new service that lets users see a live personalised forecast of their household spending and how those costs will change over time.
The research has also shown that the majority of Brits are more concerned about other households than they are about their own. This indicates that most people believe the current crisis is mostly someone else’s problem – a classic sign of anxiety and ‘avoidance behaviour’.
Nous.co has been tracking a representative sample of UK households since the start of 2022, regularly examining their views on and responses to the cost-of-living crisis. Their robust statistical survey represents 500 households and tens of thousands of data points. The households contain a mix of income, age, size and geographic location.
The good news is that households are becoming more aware of the issues over time, but awareness still has a long way to go to match the dismal reality of the situation.
In February, for instance, around 4 in 5 households thought the impact on their bills would be less than £1,000, and this number had dropped to 2 in 3 by the end of March 2022. However, despite almost wall-to-wall TV coverage, warnings from politicians and commentators alike, fewer than 1 in 20 households correctly estimated the impact that the cost of living crisis will have on their household budget.
Greg Marsh, CEO and co-founder of Nous.co, the online cost-of-living champion, said: “The impacts to UK households are coming from all sides. The biggest factor is energy, which has doubled in cost in the last year or so. But when you add in fuel prices at the pump, commuting costs, tax rises, above-inflation utility price increases, higher interest rates and their impact on mortgage payments, as well as food inflation, the impact on household budgets is the worst we’ve seen in a generation.
“What is most worrying is that people still think that this is happening to someone else. It is always best to be prepared. Households vary massively, and it’s important to know the impact as it will be felt in your household, not based on an average number. We advise people to use online tools like Nous.co to get smart and understand the impact of this crisis on them - the sooner the better.”
