More than 7 million adults still struggling to pay bills, survey finds

Some 7.4 million UK adults are still struggling to pay bills due to the high cost of living, a survey suggests.

The number has fallen from last year, according to the Financial Conduct Authority (FCA), but many households still feel "heavily burdened".

Its survey suggested one in nine adults (5.5 million) had missed a bill or credit payment in the six months to January 2024.

One in nine people also had no disposable income, the FCA said.

Despite inflation - the rate at which consumer prices are rising - slowing in recent months, the cost of living is still hitting households hard. Energy bills and food costs remain much higher than they were a few years ago.

It is also more expensive to borrow money after interest rates were hiked to their highest level in 16 years in an effort to slow cost increases for goods.

Sheldon Mills, executive director of consumers and competition at the FCA, said its survey showed "many people are still struggling with their bills", but added it was "encouraging to see some benefitting from the help that's available".

The regulator, which oversees the UK's financial companies and financial markets, said its annual cost-of-living survey consulted 3,450 UK adults, which its researchers then analysed to make projections for the whole population.

Its main findings suggested that in January 2024:

The FCA said about half of all adults had cut back or delayed spending on smaller things such as eating out and clothes, and cut back on food shopping.

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Meanwhile 26% had resorted to working more hours or working overtime or taking a second job or starting a "side hustle" to earn extra money.

Some 12% had gone without some meals because they could not afford them, the survey found.

Caroline Dove and Becky Ward, from Cambridgeshire, have been cooking and delivering hundreds of hot meals for people in need. They used to supply up to 40 meals twice a week when they started 18 months ago, but now it is about 90.

"One of my elderly ladies was actually buying dog food because it was cheaper than human food," said Ms Ward.

"She said she's gone through the war and the rations and all that sort of stuff and so dog food didn't taste any different to her."

Ms Dove said she pays for all the costs for ingredients and cooking, adding: "We are all hitting hard times, as long as I have enough to get by myself, my grandkids, what else do I need?"

The FCA said people who rent, single adults with children, adults from minority ethnic backgrounds, and people living in the north east of England were "more likely to be in financial difficulty".

The headline figure in the research, that 7.4 million - or one in seven people - were struggling to pay bills and debts, has come down from 10.9 million in 2023.

But the number of people experiencing such problems was still well above the level (5.8 million) that results suggested in 2020, before the cost-of-living crisis began.

Similar to 2023's survey, utility bills were the most commonly missed bills over the six months to January 2024, followed by credit card bills and council tax.

While mortgage holders were slightly less likely than average to be in financial trouble, the FCA said there was an increase in the proportion struggling who had asked their provider to reduce their monthly payments or provide a payment holiday.

It added more than a fifth of adults in the year to January 2024 cancelled an insurance or protection policy, reduced their level of cover, or chose not to buy a policy to save money.

Mr Mills urged people worried about keeping up with payments to contact their lender "straight away" as support options are available, and discussing these will not affect a credit score.

In response to the FCA's findings, Conor D'Arcy, interim chief executive of the Money and Mental Health Policy Institute, said it was "encouraging" that the number of people struggling with bills had dipped but added with millions still behind on payments, "the impact of the cost of living crisis on our finances and mental health is likely to last a long time".

He said there was "more for lenders to do" to help, including "reaching out to customers with support before people seek it".

Richard Lane, chief client officer at StepChange, said people on lower incomes were "particularly struggling to repay significant household debt and relying on credit to keep up".

"Research has shown that people in financial difficulty are often struggling with anxiety, embarrassment and stigma, and tend to try and juggle their finances and cope for too long before seeking help, when they could benefit from lender support and free debt advice sooner," he added.

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