The upcoming recession is expected to trigger a wave of payment defaults
As the cost-of-living crisis squeezes British households, many have fallen behind on their bills, according to the Which? Consumer Insight Tracker.
Data released on Wednesday shows that an estimated 1.9 million households have failed to make at least one mortgage, rent, loan, credit card, or other bill payment over the last month. The figure is up from 1.7 million households this time last year.
The report indicated that missed payment rates generally tend to be lower in the lead-up to the holiday period and peak in January, when many households have to pay back their Christmas expenses.
The data suggests that there could be a significant wave of payment defaults in the coming months as the UK heads into recession, and consumers will only face further financial pressures in 2023.
Which? data shows that energy bills have been missed the most (2.3% of households), followed by council tax (1.9%).
Overall, renters were more likely to have missed a housing payment. Of those surveyed, 3.1% reported having missed a loan or credit card payment.
“We’re worried that many more people could be facing financial crisis in January – as the credit repayments pile up and the cost-of-living crisis continues to bite,” Rocio Concha, director of policy at Which? said.
“As so many people face financial hardship, Which? is calling on businesses in essential sectors like food, energy and broadband providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis.”
According to the latest report by research group GfK, consumer confidence in the UK has remained at its lowest level in almost 50 years for eight months now, as households across the country grapple with the deepening cost-of-living crisis.
Inflation in the UK reached 10.7% in November, according to the Office for National Statistics, which is more than five times the 2% target.
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December 24, 2022 at 08:14PM