Millions are failing to pay key bills, including mortgages and energy, as families brace for a fresh round of punishing price rises within days.
Prices are set to surge by as much as 17.3 per cent on broadband and mobile, while council tax, water bills, prescription charges and stamp prices will rise from the beginning of April.
The biggest squeeze on living standards since the 1950s means as many as 2.5million households have missed ‘must pay’ bills in recent weeks, according to research by Which?
And while millions are making cutbacks on spending, including food, many do not have enough money in the bank at the end of the month to cover the cost of essentials.
Director of policy and advocacy at Which?, Rocio Concha, said: ‘Millions of households are struggling to get their finances on track amid huge pressure on the cost of living.
The biggest squeeze on living standards since the 1950s means as many as 2.5million households have missed ‘must pay’ bills in recent weeks (file image)
Which? research found that 60 per cent of households made at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines (file image)
‘This should set off alarm bells, particularly as painful increases to many essential bills are due to take effect in a matter of days.’
She added: ‘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.’
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Typically, many households struggle to cover essential bills in January following the spending excesses around Christmas, however Which? said this phenomenon continued through to February and March.
It said: ‘January is usually the month where the highest number of households tend to miss or default on housing, bill, loan or credit card payments, as people face a reckoning over the cost of Christmas.
Usually, this figure is lower in February and March as people get their finances under control – however this year it has stayed worryingly high.
‘An estimated 2.5million households (8.8 per cent) missed or defaulted on a payment in March, compared to the 8.2 per cent and 8.1 per cent seen in January and February respectively.
‘It is rare for the rate to stay so high for multiple months.’
Which? research found that 60 per cent of households made at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month.
These include cutting back on essentials, dipping into savings, selling possessions or borrowing.
In more positive news, Which?’s latest consumer insight research found that, despite the high pressure on finances, there has been a slight recovery in consumer confidence, although it remains in negative territory.
Some 21 per cent think the UK economy will get better over the next 12 months, while 54 per cent said they think it will get worse, giving a net confidence in the future economy of -33. This is better than the figure of -68 seen six months ago.
Hopes that energy bills may finally start to fall from July onwards together with the government’s decision to remove the price penalty for having a prepayment meter for gas and electricity has helped.