More than a third of UK households concerned about finances

New research has revealed the impact of the cost of living crisis, as 10 million households say they are concerned about their financial outlook over the next three months.  

This is a 77% increase from this time last year, meaning 35% of all households are now worried about household costs.  

11 million people also agree that they feel they have no control over their financial situation, while four million strongly agreed. 

Global investment company abrdn’s Finanical Fairness Tracker, analysed by the University of Bristol, has been monitoring personal finances since the start of the pandemic, sampling 6,000 people.  

Professor Sharon Collard, Chair in Personal Finance at the University of Bristol, said: ‘The number of households feeling they have no control over their household budgets is worrying. It raises real questions for policy-makers – and society more generally – about how best to mitigate the effects of financial difficulty in the coming months.’  

Data shows financial concerns are already affecting people’s health, with over 12 million households reporting difficulty in keeping their homes warm this year. Nearly 10 million also say they have eaten lower quality food, while five million say they are eating fewer meals to get by.  

At a mental health level, six in ten of all households in the country say thinking about their finances gives them anxiety.  

To cope with the financial pressures, the tracker found Brits have introduced several coping strategies by cutting spending in different areas. 

Holidays abroad or in the UK have been the hardest hit, with 45% of households cutting back, a 7% increase from the year before. The next biggest decrease in spending was on keeping homes warm, with 44% of households doing this.  

When asked what people had done over the last four weeks to cut spending, 53% said they reduced oven use, 44% saved less money than usual and 23% used savings to cover daily expenses.  

17% also used credit cards, an overdraft or borrowed money from formal lenders to cover costs and 7% sold of pawned their possessions.  

Rising interest rates have also left 75% of mortgaged households very or quite worried about their financial situation over the next 12 months.  

1.3 million private renters and 1.4 million social renters are also estimated to be having trouble covering housing costs.  

‘If there is too little support for households’ immediate finances, there will almost certainly be costs of inaction which hit other parts of society – for example, increased pressure on the NHS due to conditions caused by cold homes, worsening diets or worsening mental health,’ continued Professor Collard.  

‘The support measures announced in the November Autumn statement are not insignificant and will indeed make a real difference to many households – but, while the wider economy continues to struggle, millions of households across the country will be forced to contend with the daily reality of budgets that just won’t stretch far enough.’ 

Photo by Andre Taissin