Credit, Collections & Insolvency News
The number of families with children at home who believe they won’t be able to afford their energy bills is set to rise by an additional 27% over the next three months, pushing an additional one in four families into financial struggle, according to Comparethemarket’s latest Household Financial Confidence Tracker.
Over a third (36%) of households with children at home are currently struggling to afford energy bills (compared to 19% amongst households without children at home). However, from the 1st of April 2023 the Government’s Energy Price Guarantee will increase by 20% from £2,500 to £3,000. Following this change, the number of families with children to look after who say they won’t be able to afford energy rises to nearly two thirds (63%), compared to 46% amongst families without children at home.
Households with children (36%) are nearly twice as likely to feel unconfident about paying their energy bills compared to those without children (19%). Energy bills are the most concerning bill for 76% of households with children, followed by food bills (42%) and fuel (29%).
Rising costs are already making it difficult for families to manage their finances. Over the past few weeks, 44% of households with children in the house have found it difficult to pay household bills, compared to 24% without dependents at home.
For families with children, this represents a 52%* percentage increase in household financial stress compared to the first Covid-19 lockdown in April 2020, when just under a third of families with children (29%) were concerned about meeting the demands of household bills.
Comparethemarket’s Household Financial Confidence Trackershows that many families are cutting back on any discretionary spending to cope with the rising price of day-to-day necessities. Six in ten (62% ) households with children are spending less eating out, 58% are spending less on clothes, and 48% are spending less on holidays. Almost one in two (45%) households are also cutting back on Christmas presents for family and friends this year, and one in three (34%) households say they will need to take on additional debt to cope with rising prices.
Ursula Gibbs, Director at Comparethemarket, said “Households are already facing a winter of high energy costs and the increase to the Energy Price Guarantee in April will only add to the pressure on finances. It’s worrying that many households are having to cut back on essential spending and go into additional debt to make ends meet.”
“While the energy crisis means that there are very few switchable tariffs available on the market, there are practical steps you can take to save money. Before further price rises come into effect in April 2023, people should check all their household bills to see where they could make savings and encourage friends and family to do the same. Comparing prices online is one of the best ways to check you’re getting value for money.”