Which?’s monthly consumer insight tracker looks at the number of households, which have missed or defaulted on an essential payment such as a housing bill, loan or credit card payment.
The most recent statistics look at figures up to 13 July and worryingly, with another base rate hike on the cards for tomorrow, the statistics suggest that the number of missed payments are similar to those seen back in winter when energy costs were much higher.
Of these missed payments, 1.5m households missed or defaulted on a bill payment such as an energy, water or council tax bill in the month to 13 July. Two-thirds of those who missed a household bill payment reported that they missed more than one household bill payment.
Of those who missed a household bill payment, almost half (49%) missed a water bill, around half (48%) an energy bill, four in 10 (38%) a phone bill and around a third (34%) a council tax payment.
Missed housing payments
The Which? consumer insight tracker also estimated that 770,000 households missed or defaulted on a housing payment in the month to 13 July, with one in 20 renters (5.7%) and 3.4% of mortgage holders missing a housing payment.
Almost six in 10 (59%) households reported making at least one adjustment – such as cutting back on essentials, dipping into savings, selling possessions or borrowing – to cover essential spending such as utility bills, housing costs and food in the past month. This equates to an estimated 16.7m households.
Drop in consumer confidence
A drop in consumer confidence in both their own household’s situation and the UK economy was also observed in the month to 13 July. This followed the release of May inflation figures in late June showing inflation being more persistent than expected, leading to a further jump in interest rates and the removal of some mortgage products from the market.
Consumers’ level of confidence in their current household situation fell 16 points in the last month to +9 in the month to 13 July – down from +25 in the month to 9 June.
Less than a fifth of consumers said they think their household financial situation will get better over the next 12 months, whilst four in 10 said they think it will get worse, giving a net confidence of -20.
Confidence in the UK economy over the next 12 months dropped 16 points to -47 in the past month, with 14 per cent of consumers thinking the UK economy will get better and 61 per cent believing it will get worse.
Calls for businesses to do more to help
Rocio Concha, Which? director of policy and advocacy, said: “Our research has found that the number of households missing essential payments has risen to 2.4m – in line with the high levels seen last winter – showing that though inflation might have peaked, the human cost of the cost of living crisis continues to rise.
“With interest rates predicted to rise again tomorrow, these pressures on household finances are only set to increase. We’d encourage anyone who’s struggling to seek free debt advice and reach out to their bill provider for help.
“As so many people face financial hardship, Which? is calling on businesses in essential sectors, like food, energy and telecoms, to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis.”
