One in five Brits are anticipating being plunged into debt by spiralling energy prices and the rising cost of living, fresh data has revealed.
A shocking 42 per cent of UK adults expect they will struggle to pay a regular bill such as their gas, electricity or council tax in 2022 with the figure rising to almost 50 per cent amongst 25-49 year olds, a YouGov survey revealed.
The data comes as the country braces for fresh energy price hikes, with bills expected to rise by £1,300 per year by October – a move which could plunge an estimated 10m Brits into fuel poverty.
“These figures make for grim reading and emphasise just how dire the coming months will be for financially vulnerable people,” commented Phil Andrew, Chief Executive of StepChange, a debt advice charity which commissioned the YouGov survey.
“While the initial raft of support announced in February was welcome, the war in Ukraine has exacerbated an already difficult situation and more action is clearly needed,” he added, noting that the firm is expecting to offer debt support to 191,000 clients this year, up from 158,000 in 2021.
With inflation running at 5.5 per cent, financial insecurity is already on the rise with debt services reporting a surge in demand.
Citizens Advice told City A.M. that it has supported more than 20,000 people with debts to their energy company, a 29 per cent increase compared to last year. In the same period, we’ve supported more than 55,000 people with referrals to food banks and charitable grants, an increase of more than one third.
Ophelos, a debt resolution company which works with energy, financial services and buy now pay later firms, told City A.M. that it has seen demand for its services increase by 40-50 per cent since the start of 2022.
“Particularly over the past two months, we have noticed more and more customers falling into debt,” commented Ophelos chief executive Amon Ghaiumy.
“What we’re seeing is sometimes quite harrowing,” Ghaiumy continued. “I don’t see the government propping up households unfortunately, so there will be suffering from increased energy price and other areas of inflation.”