Harrowing figures from the Office for National Statistics show that one in four adults in the UK are now experiencing financial vulnerability, illustrating just how many people are struggling to afford even the bare necessities as cost-of-living pressures pile on. O
ne in 20 people reported they are unable to put food on the table, and more than a third (35%) of adults are finding it difficult to afford their rent or mortgage payments.
Mortgage holders and renters are among those with higher odds of experiencing financial vulnerability, and this will largely be due to soaring mortgage interest rates and higher rent costs.
Indeed, 27% of people reported that their rent or mortgage costs had caused their cost of living to increase compared to just a month ago.
While this figure is already relatively high, it suggests there are still a lot of people who are shielded by previous fixed rate mortgage deals. As more people’s deals run out and they are faced with the prospect of drastically higher rates, we can expect this figure to increase significantly.
Given mortgage rates have hit the highest level for 15 years, with the average two-year fixed mortgage rate reaching 6.6% earlier this week, an increasing number of people will struggle to afford their rising payments.
The recent Mortgage Charter will give homeowners a bit of breathing space, and it is vital that people stay calm and speak to their lender or mortgage broker if they have any issues.
Lenders do not want to deal with defaults on their loans and they are there to help in the first instance.
Karen Noye is mortgage expert at Quilter
