As per the report, more than 10.9 million Brits found it challenging to pay their bills in January, compared to 7.8 million last May. The stress level of more than 28 million people is increasing daily, as they have admitted that they are losing their sleep over money worries.
The report further revealed that roughly 11 million people are still struggling to repay their bills and credit obligations.
As per the Financial Conduct Authority (FCA), one in five adults was burdened with fulfilling their financial commitments at the start of this year.
The number of people defaulting on their loans and bill payments increased from 4.2 million in May 2020 to 5.6 million at the beginning of this year.
More than 5,000 adults 18 and older were polled as part of the FCA research, which was based on data from the UK-wide Financial Lives survey.
The report also gave an insight into the mental problems caused by the devastating impact of the cost of living on the population.
Spending sleepless nights
More than 28.4 million people admitted to feeling anxiety and stress in January compared to the last six months as the increasing cost of living took a toll on them.
Roughly 28%, or more than a quarter, admitted losing their sleep over money worries.
People have taken severe actions, including one woman who used credit to pay for her grocery shopping, auto maintenance, and homeowner’s insurance. One woman filled her oil tank and used all of her savings to heat her house.
One mother chose to remove her kid from her auto insurance, while another chose against going to see her family since it would be expensive to travel a great distance to see them.
About 11% acknowledged neglecting financial issues, such as warning letters that went unread.
Additionally, according to the study, 34% of renters and 29% of homeowners with mortgages experienced payment hikes in the six months leading up to January of this year.
Beginning in 2023, over 6.2 million people with insurance and protection plans either canceled or decreased their protection coverage.
As per another study conducted by HSBC in April, 78% of Brits are proactively looking for alternatives to reduce their outgoings.
Roughly half of the 2,100 people questioned by the renowned bank revealed that most are refraining from buying non-essential products, while 40% admitted to sticking to a tight budget.
More than 45% admitted to buying their groceries at a cheaper supermarket because they wanted to reduce their bills.
Furthermore, the bank also revealed that roughly 200,000 customers canceled their mobile banking app subscriptions.
Help can be provided.
“Our research highlights the real impact the rising cost of living is having on people’s ability to keep up with their bills,” stated Sheldon Mills, the FCA’s executive director of consumers and competition.
Advising lenders, the regulator stated that they should provide tailored support to the people that are struggling, he said, adding further: “We will continue to act quickly to make sure financial firms help their customers who are facing financial difficulty or are worried they might be soon.”
Jose Carvalho, the head of wealth and personal banking at HSBC, stated: “The increased cost of living is taking its toll on many people, but our research shows people are doing the right thing by taking action to get a grip on some of their discretionary spending.”
The bank is actively engaged in guiding both customers and non-customers by offering free financial health checks and webinars.
People can also visit MoneyHelper, a government-backed firm offering free, impartial help and advice.
- Published By Team Timeswire