Back in 2019, mortgage holders had a surplus of £61 after essential bills were paid, but now they face an up to £147 a month shortfall, according to the Citizens Advice cost-of-living dashboard.

The charity said mortgage holders have gone from being “one of the most protected groups” to now facing a negative budget, with more homeowners turning to it for help.

It revealed the number of mortgage holders it is helping with “crisis support”, which includes food bank referrals and emergency grants, has soared 177% between the six months of 2020 and the same period in 2023.

This means a total of 4,215 mortgage holders have been offered advice in the first half of this year compared to 1,521 three years ago.

But Citizens Advice found that some groups are suffering more than others, and are having to deal with greater negative budgets due to the current cost-of-living pressures alongside structural inequalities.

People of colour were found to have a monthly deficit of £276, while single parents and disabled people are in the red by £182 and £164 respectively.

UK inflation came down to 7.9% in the year to June from 8.7% for the year to May, in what was a more significant fall than many analysts anticipated.

It has sparked hope there will be a smaller base rate rise than the half point rise forecast last month when the Bank of England’s Monetary Policy Committee next meets on 3 August. 

Rent reform bill should be pushed forward

Citizens Advice has also called for the Government to bring forward the much awaited Renters Reform Bill, which seeks to improve the rights of renters from unfair landlord eviction practices.

Currently the charity is helping a record number of renters with homelessness and Section 21 “no fault” evictions, where tenants can be evicted for no apparent reason.

Recent analysis by campaign group Generation Rent discovered that a Section 21 eviction claim will be made every 15 minutes over the six week summer period.

The charity is also calling for a small targeted fund for mortgage holders on low incomes who are at real risk of losing their home.

‘Too many people living on empty’

Clare Moriarty, chief executive of Citizens Advice, said: “People who can’t cover their essential bills risk being sucked into a spiral of debt.

“Our latest analysis is a sobering reminder that, despite cutting their spending back to the absolute minimum, too many people are simply living on empty.

“The Government must look at ways of preventing mortgage holders and renters from falling further into the abyss.”