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Two million households miss or default on payments in March

Rebecca Goodman
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Rebecca Goodman

In March around 2.5million households, or 8.8% of the population, either missed or defaulted on a payment, according to new data.

This is a higher level than in January and February, which saw levels of 8.2% and 8.1% respectively, which are the months when traditionally finances are usually more strained.

The level reported in March is ‘worryingly high’ according to the data from consumer group Which?.

The group said it is rare for this figure to stay so high for multiple months and it has now remained at around 8% since last September.

The problem is likely to get worse as millions of households will face prices increased in April. Energy, broadband, mobile, water, and council tax bills are among those set to rise.

Broadband bills, for example, are set to rise by more than 14% for millions of customers in April. The cost of energy is also set to get more expensive as although the Energy Price Guarantee will remain in place at £2,500, the Energy Bills Support Scheme is about to end.

Six in 10 of those surveyed by Which? Said they had made at least one adjustment to cover essential spending. This is compared to four in 10 in December 2021.

These adjustments included cutting back one essentials, using savings, selling possessions, or borrowing money.

Consumer confidence recovering

A fifth of consumers said they think the UK economy will get better in the next 12 months while 54% said it would get worse, with a rate of -33 of those who had confidence in the future economy.

This is compared to -68 six months ago and -17 seen before the pandemic.

Which? is calling on essential businesses, including supermarkets and broadband providers, to ensure they are helping people where they can.

Rocio Concha, Which? director of policy and advocacy, 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.”