You are here: Home - Credit Cards & Loans - News -

Cost of living crisis: Brits borrow more and miss bill payments

Written by: Emma Lunn
More than one in five (22%) people are borrowing more than they did this time last year, according to figures from the Office for National Statistics (ONS).

The ONS Public opinions and social trends, Great Britain: household finances study found that 8% have had a direct debit, bill or standing order they’ve been unable to pay in the past month.

More than one in 20 people are behind on their energy bills. This figure rises to about one in 10 of those aged 16 to 49, and women.

The ONS found that almost half of households (46%) find it very or somewhat difficult to pay their energy bills – rising to more than half of those aged 16 to 49.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “It’s crunch time for the cost-of-living crisis. After a year of shopping around and cutting back, there’s no fat left to trim from our spending, so we’re running into a brick wall financially. Many of those who can still borrow are going further into the red, while others have started missing bills.

“Almost one in 10 (8%) people have had a direct debit, bill or standing order they’ve been unable to pay in the past month, which rises to one in ten (10%) of those aged 16 to 29, and an alarming 13% of those aged 30 to 49. 

“People in their 30s and 40s often have their finances stretched to the maximum even in the best of times, as often they’re juggling all the demands of young families and buying a property.

“Almost half of us are finding it very or somewhat difficult to pay energy bills (46%) – rising to more than half of those aged 16 to 49 (54% among those aged 16 to 29 and 52% among 30 to 49-year-olds). Increasingly this is tipping over into an inability to pay – which has risen to 6% overall – the highest it has been since mid-July last year.”

The ONS figures show that rising prices have hit younger people harder, with one in ten (10%) of those aged 16 to 29 behind on energy bills. This is no surprise, as younger people tend to be on lower incomes, and spend a higher proportion of their income on the basics. 

Hargreaves Lansdown’s Savings & Resilience Barometer found that the inflation rate for the essentials is running at twice the pace of non-essentials, so these price rises are a major blow for younger people.

Women are also struggling with these costs, with 8% admitting to being behind on energy bills – the highest number since the ONS started asking the question in March last year. 

Women are paying for the fact they tend to be on lower incomes than men on average.

“Those who still have the ability to borrow more are often opting for this approach rather than falling behind on bills, so the number of people who are borrowing more than they did a year earlier is also trending up,” said Coles, “In the two months to 8 January, the number of people who have borrowed more in the previous year averaged 22%. This is the highest the rolling average has been since the ONS started measuring it in November 2021. And while borrowing feels like a solution in the short-term, once you run out of capacity, you’ll face all the same challenges – plus a mountain of debt hanging over you too.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week