Price spikes cause greater financial stress than the pandemic.


According to research following the fortunes of UK households from the epidemic’s beginning, rising costs have put more individuals in financial distress than Covid-19.

A total of 1.6 million more households are in financial distress than nine months earlier, according to a study of 6,000 households. As a result, there are now 4.4 million households in the United States experiencing “severe financial troubles.”

According to the findings, most individuals affected have reduced the quality of their diets, a third have pawned items, and a quarter has canceled their insurance. People who are single, handicapped, or have more than three children are the most affected. Debt on credit cards is on the rise, and a fifth of Americans lack savings.

Households earning more than £100,000 per year have experienced less financial stress since October 2021, according to a study conducted by Abrdn Financial Fairness Trust and Bristol University.

“This is the first significant decrease we had witnessed since tracking people’s money when the epidemic started,” Mubin Haq, the chief executive of Aberdeen Financial Fairness Trust, said.

Prices have risen, making life more difficult for everyone, but those with the lowest incomes are severely affected.

From 38 percent to 31 percent, the percentage of homes rated safe has decreased. More than one-fifth of households in Wales and Scotland are experiencing “severe financial difficulties,” a worse situation than in England and Northern Ireland.

Energy bills, transportation, and food prices have contributed to rising expenditures.

When the energy price ceiling is next changed in October, economists expect it will climb to £3,244 per year from its current level of £1.971 per year. Last month, the annual rate of inflation in supermarkets was 8.3%.

The most prevalent ways to save money from May through June were turning off the heater, cutting less on cooking, and showering and bathing less frequently.

There is no better time for Dean Burn, a 62-year-old semi-retired IT project manager in Stockport, Greater Manchester, to tell the Guardian about his financial woes. This man’s monthly rent, utility, and council tax costs are now £520 and £260, respectively, yet he only receives £850 in universal credit payments. It’s not enough, and he’s had to go into his savings and the council’s emergency funds.

With more than £7,000 in credit card debt and having lost his car, he now relies on food banks and is cutting back on meat consumption. Additionally, he prefers to walk rather than use the bus and no longer has a television subscription.

“I don’t know how I’m going to heat my house this fall,” he responded when asked how he planned to do so.

For the first time in a long time, he hasn’t been to the pub or the beach. He claims that the only light coming from neighboring homes after dark comes from TVs because they are trying to save money on power.

His fear of being homeless drove him to seek help from the city council last week.

To put it another way, he was counting down the hours until his next paycheck. “I’ve been employed for 41 years now. ” “This has influenced me.”

Study results indicated a 9% to 14% increase in homes delinquent on at least one bill.