In March almost a quarter of adults (23%) found it difficult or very difficult to pay household bills, up from 17% in November, according to the latest ONS data.
Nine out of 10 (87%) people reported an increase in the cost of living in March. This is up from 62% in November.
Some 17% of people reported borrowing more money/using more credit than they did a year ago.
The most common reasons behind cost-of-living increase were food shopping (88%), gas and electricity (83%) and fuel (77%).
The most common coping mechanism is to use less gas/electricity with 45% of people saying this in March. In December/January it was 28%.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “The cost-of-living crisis is escalating quickly with almost a quarter of people having trouble in paying their household bills.
“Pretty much everyone is feeling the pinch but those on lower incomes are particularly badly affected with prices rising fastest on life’s essentials such as food and heating bills.
People report trying to use less fuel as a means of keeping costs down and there are also signs people are cutting back on their food shops.
“However, people can only cut back so far on these things so there is precious little room for manoeuvre.
So far, the current situation hasn’t translated into people falling behind with rents or mortgages – only around 3% of people have reported this, a figure that has remained largely stable.
“However, this could be because people are burning through their lockdown savings in a bid to meet their day to day living costs while others opt to borrow more to meet their needs.
“Mortgage payers have had the option to fix their costs in recent months, but those who rent will feel very exposed to further increases in the coming months.”
Rosie Hooper, chartered financial planner at Quilter, added: “With many settling into a post-pandemic life with the worst of the restrictions behind them this period should have been a positive time.
“However, with the cost-of-living crisis stretching people’s finances like never before it may for some prove to be even more challenging.
“A scary 30% of people are finding it hard to service their mortgage and/or loan, or rent, or shared ownership payments.
“If finances are stretched even further and this difficulty becomes an impossibility, we could have a significant problem on our hands with thousands of people defaulting on their payments and potentially losing their homes.
“If you feel that your mortgage is becoming unmanageable then it’s important to talk to your lender as soon as possible. Burying your head in the sand is the worst course of action although often the seemingly the easiest in the short-term.
“There are a variety of ways lenders can help and they will work with their customers to create payment plans that may be able to help ease the financial burden.
“Generation rent who have already had to suffer ever increasing house prices are now going to struggle even more to save for that elusive deposit to get on the housing ladder.
“The ONS analysis found that 43% of respondents reported that they would not be able to save money in the next 12 months, which will mean any house purchasing plans will need to be put on hold until once again deposit pots can start to be funded again.
“This may further take the wind out of the sails of the housing market as fewer potential buyers reduces demand and house prices with it. We are in for a tough few months or even years but it is always best to seek help if you are struggling with your finances to avoid spiralling into debt.”
