More households in “serious financial difficulties” than during the pandemic

It found that more people are in financial trouble during this year’s cost-of-living crisis than they were then.

A total of 4.4 million households are struggling (one in six) in “serious financial difficulties” across the entire population.

The figure is 1.6 million more than the last time the study of 6,000 households reported in October 2021. 

Most surveyed had reduced the quality of their food intake, a quarter have cancelled insurance and a third have pawned possessions, according to the research. 

Credit card debt is rising and a quarter have zero savings.

Single parents, renters, disabled people and families with three or more children are worst affected. 

The proportion of households considered “secure” has dropped from 38% to 31%. In Wales and Scotland, more than one in five households are suffering “serious difficulty”, with England and Northern Ireland slightly worse affected. 

Households with income in excess of £100,000 per annum are the only group in less financial strife since last October.

The hardship has been driven by soaring energy bills, transport costs and groceries – in that order.

“This is the first substantial deterioration we have seen since tracking people’s finances when the pandemic started,” said Mubin Haq, the chief executive of Abrdn Financial Fairness Trust.

“Times are tough for everyone, but it’s those on the lowest incomes who are particularly feeling the effects of rising prices.”