As the cost of living crisis rumbles on and household finances continue to feel the squeeze on income, new research has just revealed that 4.7 million people have now fallen behind on their bills, while 7.2 million are having to forgo the basics such as food, clothing and toiletries in order to keep head above water.

Carried out by the Joseph Rowntree Foundation (JRF) (1), the study found that the households on the very lowest incomes are the ones struggling the most, although private renters, young adults and those on Universal Credit are all now starting to see rising levels of hardship, as well.

The JRF has called on the government to provide additional cost of living payments, including a minimum of £450 for those on means-tested benefits over the winter months.

In addition, it is keen to see changes made to Universal Credit to ensure that the basic support rate is never so low that people are unable to afford essentials such as food, utility bills and basic household goods.

And it has recommended that the Local Housing Allowance be unfreezed to help people keep up with the rent, reinstating the allowance so it covers the bottom 30th percentile of rents.

JRF senior economist Rachelle Earwaker observed: “For hundreds of thousands of households it’s not a choice between putting the heating on or not. Our research shows they can’t afford anything recommended to protect themselves from the effects of plummeting temperatures.

“We’re still experiencing historically high inflation and the prices of essentials are still soaring. Energy bills, while capped, are still almost double what they were last winter. Housing shortages, rising rents and mortgage payments are overburdening budgets across the country.”

She went on to say that with the current cold snap is also concerning, with people being forced to choose between their wellbeing and whether or not they can afford to take on more debt (2).

Because of the cost of living, we are all now having to pay a lot more for our food, energy, rent and fuel. This means that many are now cutting back on how much they spend on food or even eating less, so they’re able to afford their heating bills this winter. 

Others are falling into arrears or having to rely on credit to cover the essentials, which is only making the situation worse – and harder to get out of.

If you are struggling at the moment because of increased living costs, we can work with you to find the most appropriate debt solutions for you and your specific set of circumstances. 

We are helping all our clients through this difficult period and have information and guidance available if you are finding it hard to manage your budget or your debts. Get in touch with us today to find out more.

References:

1. https://www.jrf.org.uk/report/going-under-and-without-jrfs-cost-living-tracker-winter-202223

2. https://www.jrf.org.uk/press/over-three-million-low-income-households-said-they-have-not-been-able-keep-their-home-warm