One in six households in the UK, about 4.4m, face “serious financial difficulties” as the cost of living crisis worsens with inflation at 40 year highs.
This is an increase of 1.6m households from October last year, with over half of all UK households considering their financial situation to be worse now than during the pandemic, research by abrdn Financial Fairness Trust and the University of Bristol found.
In addition to the 4.4m households in serious financial difficulties, an additional 5.7 million, 20 per cent, are struggling financially. This equates to more than 10 million, 36 per cent, of UK households either in serious financial difficulties or struggling.
Of those 4.4m households, to cope with the financial strain, 71 per cent have reduced the quality of food they eat, 36 per cent have sold or pawned their possessions, and 27 per cent have cancelled or not renewed insurance.
Professor Sharon Collard, Chair in Personal Finance at Bristol, said, “Lots of people are cutting back to cope with the cost of living crisis. What really surprised us was how many people are cutting back and the variety of methods.”
People have also coped with the surge in energy bills since the start of this year, with 60 per cent not turning on the heating, 33 per cent not using the cookers/ovens, and 31 per cent cutting down showers and baths.
58 per cent of households are “very/quite worried” about their financial situation, especially disabled households at 72 per cent and those receiving or applying for benefits, at 77 per cent.
Single parents have seen the biggest drop in financial wellbeing, with the proportion in serious financial difficulties increasing from 23 per cent to 37 per cent since October 2021.
Mubin Haq, CEO of abrdn Financial Fairness Trust, said: “The latest findings from our survey starkly show that people are facing a significant squeeze to their finances.”
“Times are tough for everyone, but it’s those on the lowest incomes who are particularly feeling the effects of rising prices.”