Around four in 10 (39%) adults reported that they would not be able to save money in the next 12 month, according to the latest findings from the Office for National Statistics (ONS).
As part of its new report, ‘Impact of increased cost of living on adults across Great Britain: July to October 2023’, the ONS analysed groups of the population worst affected by recent increases in the cost of living using data from the Opinions and Lifestyle Survey and the recent Wealth and Assets Survey.
According to the findings, around four in 10 (40%) adults reported that affording their rent or mortgage payments remained very, or somewhat, difficult.
Groups more likely to report this included Asian or Asian British adults (56%), Black, African, Caribbean or Black British adults (51%), and lone adults living in a household with at least one dependent child (61%)
In addition, around three in 10 adults (29%) reported an inability to afford an unexpected expense of £850; this proportion was 40% among disabled adults and 53% among renters, and increased to 66% among disabled adults who were renting.
One in 20 (5%) adults also reported running out of food and not being able to afford more.
This proportion was 8% among parents living with a dependent child and 13% among renters, and increased to 21% among renters who were parents living with a dependent child.
Reaction:
Stephen Perkins, managing director at Norwich-based independent mortgage broker, Yellow Brick Mortgages:
“These latest ONS figures are heartbreaking to read, but not surprising when you see the everyday impact of the cost-of-living crisis over the past 12 to 18 months.
“5% of adults running out of food is a tragic reflection of where the economy is at right now.
“The large percentage of households struggling to pay their rent and mortgage is only going to get worse as more homeowners and landlords come off their low-rate deals in the coming months.
“The rent trap is also in full flow with 54% of people renting unable to save anything over the next 12 months, which will damage their ability to build a deposit in order to buy a home.
“The Bank of England has caused much of this by their excessive and unnecessary rises to the base rate, which did nothing to combat the actual causes of the inflation we have had.
“They and the Government should hang their heads in shame at these figures.”
Rohit Kohli, director at the Romsey-based independent mortgage broker, The Mortgage Stop:
“The ONS report paints a sobering picture of the UK’s current economic landscape. Vulnerable groups, notably disabled adults, renters and single parents, are disproportionately struggling.
“Despite a fall in inflation, the cost of essentials has surged, with some items seeing over a 25% price increase in two years.
“This trend strains household finances, particularly for necessities. The mortgage sector hasn’t fully felt the impact yet, but with a tough winter ahead, many face harsh choices between heating, eating or paying their mortgage or rent.
“Although some economic indicators show recovery, the harsh reality is that 2024 looks daunting for many.
“This disconnect between macroeconomic trends and individual financial experiences underscores the need for targeted support, especially in the mortgage sector.”
Riz Malik, independent financial adviser at Southend-on-Sea-based wealth manager, R3 Wealth:
“The ongoing cost-of-living crisis is impacting households nationwide across all income brackets, and the situation is expected to continue.
“An increasing number of households transitioning from ultra-low interest rates will experience a significant rise in their mortgage payments, further exacerbating the issue.
“Similarly, renters are likely to face increased financial strain as landlords refinance, leading to higher rents. It is not going to be a very merry Christmas for many.”
Ranald Mitchell, director at Norwich-based independent mortgage broker, Charwin Private Clients:
“The latest figures from ONS are extremely worrying and show how many households are struggling to keep pace with the rising cost of living. It is a pretty damning verdict on the health of UK plc.
“A large number of the population is barely getting by and, alarmingly, 5% have fallen into food poverty.
“40% of people reporting rent or mortgage affordability problems is a further concern.
“With circa 1.4 million mortgage rates due to end next year, this number will increase as more households are hit with payment shock.
“Further to this, it reinforces the need for alternative methods of homeownership for people who cannot afford to save.
“Expect to see an increase in reliance on credit as people battle to get by, but this in turn will only make matters worse.”
Joshua Gerstler, chartered financial planner at the Borehamwood-based IFA, The Orchard Practice:
“The immediate impact of the cost-of-living crisis and higher mortgage rates is clear to see in this data.
“What is not so clear, is the impact this is going to have on people for years to come.
“With less disposable income, individuals and families are not going to be able to put money aside for their future.
“With less money going into investments and pensions, families are going to have a less secure retirement and be relying more on the state for support.
“The financial strain households are under now will impact them when they retire in the future.”
Elliott Culley, director at the Hayling Island-based independent mortgage broker, Switch Mortgage Finance:
“These latest figures from the Office for National Statistics make for grim reading, but are unfortunately not surprising.
“With more mortgage holders coming off extremely low rates over the next 12 months and inflation still high, these figures are likely to get worse before they get better.
“Many households are having a brutal time of it at present.”
