As the cost-of-living crisis continues to wreck people’s incomes, it appears that nearly two million households have fallen behind on at least one large bill in the run-up to Christmas.
According to the latest findings from Which Consumer Insight Tracker, an estimated 1.9 million households have failed to pay at least one mortgage, rent, loan, credit card or other bill over the past month.
Missed payment rates generally tend to be lower in the run-up to the holidays and peak in January, when many families must pay off their Christmas expenses.
which? The data on the reading is in the boards of directors of finance and energy companies, as it indicates the possibility of a large wave of defaults in the coming months.
This time last year who? It reported that 1.7 million households missed at least one payment on a large bill, a number that rose to 2.5 million in January 2022.
With the UK on the brink of recession, higher mortgage and rent costs and lower energy price guarantees from April, consumers will face more financial stress in 2023 leading to more defaults, she warned.
Perhaps unsurprisingly, the most common type of missed bill is energy, at 2.3% of households, followed by council tax at 1.9%.
In general, renters were more likely to default on housing payments. Of those surveyed, 3.1% reported having missed a loan or credit card payment.
Rocio Concha, who? The director of policy said: “We are concerned that many people could face a financial crisis in January – as credit payments pile up and the cost of living crisis continues.
“Since so many people are facing financial hardship, eh? calls on companies in essential sectors like food and energy and broadband service providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and fees during this crisis.”
The Bank of England warned last week of “significant pressure” on households and businesses due to rising inflation and borrowing costs. Around 4 million households are likely to face higher mortgage payments in 2023, with average monthly mortgage payments rising to £1,000 (up from £750), equal to about 17% of pre-tax income.
Earlier this month, the Trades Union Congress said 2022 saw the biggest drop in real wages since 1977 and the second-worst drop on record since 1945. Analysis of official statistics revealed real wages fell by an average of £76 a month in 2022 as a result. . Of the salary does not keep pace with inflation.
A year ago, the average household spent around £1,200 on electricity and gas bills. Now that figure is £2,500. UK food inflation hit a new high of 12.4% in November.
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