After the festive period, millions of households are struggling to get their finances back on track as the number of missed payments on mortgages, utility bills and other essential spending remains high, according to Which?’s ‘Consumer Insight Tracker’.
Typically, January sees the highest number of households miss or default on housing, bill, loan or credit card payments, as people face a reckoning over the cost of Christmas. Historically, this figure lowers in February and March as household get their finances back under control. However, in 2023, the number of missed or defaulted payments has remained at concerningly high levels, according to Which?.
An estimated 2.5 million households (8.8 per cent) missed or defaulted on a payment in March, compared to the 8.2 per cent and 8.1 per cent seen in January and February respectively, the latest Consumer Insight Tracker report found.
It is rare for the rate to stay so high for multiple months. With the exception of December, the rate has remained at around or above eight per cent since September 2022.
Which?’s research comes days before more painful increases to many household bills across energy, broadband and mobile, water and council tax. With millions of people already struggling, the findings underline the need for the government and companies in essential sectors to support the most financially vulnerable.
However, the newest consumer insight research found that, although pressure on household finances remains high, consumer confidence appears to be recovering slightly.
Twenty-one per cent of consumers said they think the UK economy will improve over the next year. Meanwhile, 54 per cent believe it will get worse, giving a net confidence in the future economy of negative 33. This is a significant improvement on the negative 68 seen six months ago, but still below the levels (negative 17) seen just prior to the pandemic.
Maintaining the Energy Price Guarantee at £2,500 and removing the pre-payment meter penalty are positive steps which could offer a much-needed lifeline to households continuing to struggle with high inflation. However, these households still need further support – the current measures are simply not enough alone.
After revealing the research, Which? is calling on essential businesses to step up and help people as much as possible during the cost of living crisis.
Rocio Concha, director of policy and advocacy at Which?, said: “Our research suggests millions of households are struggling to get their finances on track amid huge pressure on the cost of living. This should set off alarm bells, particularly as painful increases to many essential bills are due to take effect in a matter of days.
“Our findings underline the need for the government and companies in essential sectors – such as supermarkets, energy and telecoms providers – to do everything in their power to support consumers, particularly those struggling financially, through this incredibly difficult time.”