Cost of living crisis: 2.4 million households miss essential bill payments
The number of households missing an essential payment has jumped to levels not seen since winter, the latest Which? Consumer Insight* tracker shows.
As the Bank of England looks set to increase the base rate again tomorrow, Which? is warning that the situation could get worse and businesses must do more to support struggling households.
Here, we explain our findings and outline what help is available if you’re struggling to keep up with household bills.
Big jump in missed payments
The missed payment rate measured 8.6% in the month to 13 July, which roughly equates to 2.4 million households missing payments on housing, utility bills and credit cards and loans.
It's a significant jump compared with May, when the rate was 6.9%, and June when the rate measured 7.2%.
The missed payment rate has returned to levels not seen since winter 2022 when the energy crisis was at its peak.
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. The chart shows the proportion of households who have missed a housing, bill, loan or credit card payment in the last month.
Which bills are households struggling with?
Of the 2.4 million households that missed or defaulted on an essential payment, 1.5 million did so on household bill payments, such as energy, water or council tax.
49% missed a water bill, 48% missed an energy bill, 38% missed a phone bill and 34% missed a council tax payment.
Worryingly, nearly two-thirds (65%) of these households reported that they missed more than one household bill payment.
770,000 households missed or defaulted on a housing payment. We estimate that amounts to 5.7% of renters and 3.4% of mortgage holders missing a payment.
One survey respondent said: ‘I am stretched to the limit financially at the moment and cannot stay afloat if the cost of living increases further. I am expecting my rent to increase to an unaffordable level very soon which will render me homeless.’
- Find out more: what steps to take if you can’t pay your rent or mortgage
The next base rate decision could add strain
Households already struggling could face further strain on their finances.
Tomorrow the Bank of England will reveal its decision on the base rate, and many predict it will rise to help curb persistently high inflation.
If it does go up, it will be the 14th consecutive rise since December 2021 and could push borrowing costs on mortgages, loans, and credit cards even higher.
It's unsurprising then, that our survey found less than a fifth of consumers said they think their household financial situation will get better over the next 12 months, while four in 10 said they think it will get worse.
Indeed, many might have exhausted options for plugging gaps in their finances. Almost six in 10 (16.7 million households) reported making at least one adjustment, including cutting back on essentials, dipping into savings, selling possessions or borrowing, to cover essential spending.
- Find out more: the Bank of England base rate and your mortgage explained
What to do if you’re struggling with bills
If you’re unable to afford utility, credit card, loan, or mortgage payments, speak to your provider for help as soon as you can.
Energy providers may be able to suggest different payment options or a different tariff and could offer you help via their hardship funds.
If you have a mortgage, your provider should be able to offer you a temporary mortgage payment holiday, a switch to interest-only payments, or an extension to the mortgage term to reduce your monthly payment
Which? calls on businesses to help
Which? is calling on essential businesses, such as energy firms, broadband providers and supermarkets, to do more to help their customers and ensure they are providing value for money.
For instance, supermarkets need to make budget line items widely available, particularly in convenience stores. Energy companies need to ensure their customer service departments are fully staffed and able to support any customers who are struggling to make ends meet. And telecoms firms need to properly advertise their social tariffs to eligible customers.
Rocio Concha, Which? director of policy and advocacy, said: ‘[The] 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, such as 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.’
- Find out more: Which? experts have compiled the latest news and advice to help households cut costs and save money on bills. You can also answer a few short questions below to get more tailored advice for your situation.
Are you worried about your finances?
*The Consumer Insight Tracker is an online poll conducted monthly by Yonder on behalf of Which?. It is weighted to be nationally representative with approximately 2,000 respondents per wave.
