Two million consumers missed payments in the last month

The study from the consumer choice group also found that confidence in the economy hit its lowest point since the start of the pandemic, as fear of a recession continues to grow. 

Just eight percent of consumers said they thought the UK economy would improve over the next 12 months - while 78% thought it would worsen - giving net confidence of -70 in June when compared to the -47 figure seen in May. 

In addition to this, confidence in future household finances saw a dip in June when compared to May - going from -28 to -40. This is the lowest amount of confidence consumers have had since the start of the pandemic in March 2020. 

Alongside this, its confidence tracker shows financial difficulty has stayed at a consistently high level. 

It found 58% of consumers said their household has had to make an adjustment - such as cutting back on essentials or dipping into savings - to cover essential spending in the last month. This is similar to the 57% observed in May and the 59% seen in April, but a significant increase from the 40% seen a year ago. 

Which?’s research also found that, while those on lower incomes are most severely affected by the rising cost of living, consumers across all ages, regions and income bands are feeling the effect. 

The majority of consumers across all income groups said they had made an adjustment to cover essential spending - with this being most common among consumer households surveyed with an income of up to £21,000 (64%). In addition to this, 57% of those surveyed with a household income of more than £55,000 had made at least one adjustment. 

And while a recent series of one-off payments announced by the government to help with the energy price cap increase in October will bring relief to many, according to Which? their success is judged on whether they continue to reach the most financially vulnerable. 

As such, the consumer rights group is urging businesses to do more to support those struggling to make ends meet. This includes broadband companies promoting discounted tariffs to those who are eligible while energy companies must be ready to help customers when the new price cap is announced and takes effect. 

It also says regulator Ofgem must move quickly on its pledge to take action against energy suppliers that are charging people too much directly - and send a clear message that this behaviour from businesses is totally unacceptable. 

Commenting on the news, Which?’s director of policy and advocacy Rocio Concha said: “Our research shows that a relentless cost of living crisis is continuing to put huge pressure on household finances – with consumer confidence in the economy plummeting to its lowest point since the pandemic.

“These pressures are especially apparent among the most financially vulnerable - with around two-thirds of those on incomes of £21,000 or lower saying they’ve had to make at least one financial adjustment to cover essentials in the last month.

“The government and businesses must ensure that targeted support reaches the ever-growing number of consumers struggling to make ends meet.”