Research by StepChange found that two in five (43%) people say their household financial situation will get worse over the next 12 months.
The charity said that two years of the cost-of-living crisis has caused a 50% rise in the number of people who are pessimistic about the future of their household finances.
The research indicates a difficult year ahead for people’s finances. When asked a similar question at the end of 2021 – just prior to the start of the cost-of-living crisis – only one in four (28%) said they expected their financial situation to worsen over the following 12 months.
The most recent study found that one in two (49%) people are worried about their current financial situation. A similar proportion (46%) said their overall financial situation had got worse since two years ago. One in five (19%) people said it had got “much worse”.
Of those who said their household financial situation would worsen over the next 12 months, three in four (74%), about 16 million people, said this was because of energy bills going up in January.
StepChange said that following two years of high living costs, keeping up with everyday expenses has become unsustainable for thousands of households. Of the one in two people worried about their household finances, half have cut back on spending on essentials and a quarter (24%) have borrowed money.
Despite so many people experiencing money worries, only 4% of those who said they were worried about their financial situation had sought professional help from an independent organisation.
More people need debt advice
However, StepChange said it saw a steep rise in the number of people accessing debt advice on Christmas Day compared to the previous year.
Almost 1,000 people accessed debt advice on StepChange’s website on 25 December 2023, up from almost 400 on Christmas Day 2022, a 143% rise.
Vikki Brownridge, CEO at StepChange Debt Charity, said: “January is always a busy time for us as a charity, and we know that it’s not just Christmas that has stretched people’s budgets this year, but almost two years of a long and challenging cost-of-living crisis.
“With energy bills having risen again, and the colder weather setting in, unfortunately the new year will not be easy on people’s finances. While we have seen a pause in the sharp rises in interest rates and inflation in recent months, the impact of this is far from over.
“For anyone struggling with debt or worried about what 2024 will bring for their financial situation, free and impartial support is available. StepChange offers confidential debt advice tailored to your personal circumstances. Opening up about your money worries can be the most important step in getting your life and finances back on track.”
