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Cost-of-living crisis is hitting people’s finances harder than the pandemic

New survey finds 1.6 million households falling into financial difficulty since October 2021, bringing the total of struggling households to 4.4 million

THE cost-of-living crisis is hitting people’s finances harder than the pandemic did, a new survey suggests, with more than four million Britons now in serious financial difficulty. 

People are resorting to eating poorer quality food, selling off their possessions and showering less often in order to make ends meet as souring inflation outstrips wages, according to new report by the Abrdn Financial Fairness Trust and the University of Bristol published today. 

The trust, which has been tracking the economic impact of the Covid crisis on people’s finances, said that its latest findings marked the “first substantial deterioration” since the pandemic hit. 

It found that a further 1.6 million households have reported falling into financial difficulty since October last year, bringing the total number of struggling households to 4.4 million. 

Many families lost income during the pandemic, but the hit to households in recent months has been worse as the cost-of-living crisis deepens, the report suggests. 

“This is the first substantial deterioration we have seen since tracking people’s finances when the pandemic started,” said trust head Mubin Haq.

“Wages have largely stagnated and are no longer keeping pace with inflation and social security is lower in real terms than it was over a decade ago.”

The survey also revealed that many people are changing their lifestyles and spending habits in order to spend less money on food, fuel and energy. 

Almost three quarters – 71 per cent – of respondents said that they had reduced the quality of food that they eat. 

Thirty-six per cent have sold or pawned possessions, 27 per cent have cancelled or renewed insurance policies and three-fifths have avoided turning on the heating. 

The poll of 6,000 people, conducted between May 25 and June 6, also revealed that some are cutting down on showers and baths. 

Among those worse affected by the cost-of-living crisis are single parents, people who rent their homes and parents with two children, while households in Wales, Scotland and the north-east of England reported higher levels of serious financial difficulty than the UK average. 

Only households earning over £100,000 did not report experiencing any increase in financial hardship. 

The trust said that a more comprehensive and longer-term plan was urgently needed to stop families’ living standards from deteriorating. 

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