Levels of financial difficulty have surged this month, evidenced by a notable increase in households missing housing, bill, loan, or credit card payments.
The proportion of households experiencing missed payments stood at 8.6% in the month to 8th March, with mortgage holders and renters significantly impacted.
The missed payment rate for mortgage holders reached 8.1%, marking one of the highest levels ever recorded for this group.
Consumer confidence regarding their financial situation has also taken a hit this month. There was a decrease in confidence concerning their current household situation by 3 points and their future financial outlook by 5 points.
Despite some consumers attributing their optimism or pessimism to the recent spring Budget or forthcoming economic policies from the autumn Budget, the majority cited other life factors, such as pay increases or struggles with ongoing price rises, as influencing their household situation over the next 12 months.
The Which? Consumer Insight Tracker reveals a concerning trend of missed payments returning to high levels. While the overall rate of missed payments slightly decreased from 8.8% in March 2023 to 8.6% this year, it remains above the 2023 average of 7.9%, underscoring the persistent impact of the cost of living crisis on household bill management.
Mortgage holders reported a significant 8.1% rate of missed payments, a figure only slightly below the record highs recorded in March and November 2023.
Interestingly, while missed payment rates rose for mortgagors and renters, the increase was driven by missed household bills, credit card, or loan payments rather than mortgage or rent payments directly. For mortgage holders, the rate of missed mortgage payments slightly decreased to 2.4% this month, suggesting that many are prioritizing their mortgage payments over other financial commitments.
With over half of households (54%) reporting adjustments to their spending on essentials in the last month, the financial strain remains evident. Although this figure represents a decrease from 60% last March, it indicates a sustained level of financial hardship compared to 2020 and 2021.
Household consumer confidence has fallen, with net confidence in their current situation dropping to +20 and their future situation to -8. Concerns about the UK economy persist, with only 21% of consumers believing it will improve over the next 12 months, while half (50%) expect it to worsen.
