Research from Which? has found 1.9 million households have missed or defaulted on at least one mortgage, rent, loan, credit card or bill payment in the last month.
The Mortgage Lender (TML) said the figure backs up its own research that signalled many households are finding themselves in weaker financial positions as they cope with the combined pressures of Christmas and the cost of living crisis.
TML’s study found inflation and rising interest rates – as well as energy and utility bills, fuel and grocery costs – are having a significant impact on consumers’ ability to meet everyday expenses and bills. According to the research, more than one in 10 (13%) adults have missed an energy bill payment since the start of 2022, and 14% admitted they have missed a usual payment of their utility bill (such as water or broadband payments).
The research also sought to understand by how much energy bills would need to go up by before adults are unable to afford paying them: 6% revealed they already cannot afford to pay their bills, 16% said they would not be able to afford their energy bill if it went up by a further 1% to 10%, while 17% said they would not be able to afford it if it went up by 11% to 25%.
In addition, the research found that 14% of adults would consider missing their energy bill payment in the future to cope with rising costs.
Peter Beaumont, CEO of The Mortgage Lender, commented: “There is no denying that we are in difficult times with the cost of living as high as it currently is. For many, the sheer cost of energy and utility bills, or even the thought of them rising, is unnerving. Indeed, some have already had to miss their regular payments in order to get by financially.
“What is perhaps more concerning though, is the number of people who would consider missing them in order to cope with rising costs. This could have a significant impact on an individual’s credit score, and ultimately their ability to access loans such as a mortgage, whether a first-time buyer or an owner remortgaging. If anyone is struggling to pay, it’s vital they speak to a mortgage broker as there very well may be options that are still available to them.”
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