88% of UK struggling with high living costs

New research has revealed that 88% of the UK is struggling to cope with high living costs, equal to an estimated 48 million people nationwide.

The survey found that over two in five (45%) indicated that the country’s high living costs are impacting them even more than last year, showing that things have been getting worse rather than better for most households’ finances.

Just over a third (36%) noted that the high living costs are impacting them around the same level as last year, with just one in 10 stating they don’t feel they’re being affected. The figures highlight that much of the nation is still feeling the crunch five years on from when the cost-of-living crisis first hit households.

The data comes from the latest survey by Go.Compare home insurance, which asked respondents about their financial challenges over the last 12 months. Just over a third (37% indicated that they’re struggling to meet essential costs (rent, mortgage, utilities), with around a quarter (24%) having difficulties paying utility bills. One in ten said they are facing challenges with rental fees, while 5% are struggling with mortgage repayments.

As a result, just over two-thirds (67% said that they have had to cancel or reduce some of their regular payments. Around a third (32%) have cut or paused savings contributions and almost one in 10 (9%) have scaled back pension payments. Streaming subscriptions have also been cancelled or reduced by 30% of adults, while one-fifth (20%) have reduced spending on internet, TV, or phone packages.

Those on lower incomes appear to have found things especially difficult, based on the data. In total, 88% of households with an income of £25,000 or less said they are being impacted by high living costs – more than half (56%) of which said they are worse affected than last year. They were also the most likely to have difficulties paying utilities and rent. The figures suggest it’s not just those on lower incomes who are struggling. Of the homes with an income around the national average (£37,000, 91% said they feel they are being impacted by high living costs (household income of £35,001 – £45,000), indicating that homes of varying income levels are struggling to make ends meet.

Parents are also facing significant challenges, with 91% of those with kids stating they have been impacted by high living costs over the last year, compared to 82% of those without.
As well as cutting back on other household essentials, one in nine (11%) reported cancelling or reducing their home insurance cover – a potentially costly decision in the long run.

Nathan Blackler, Home Insurance spokesperson at Go.Compare, said “The country has been struggling with especially high living costs for years now and our figures suggest that things are getting worse rather than better for many households.

“It’s not just those on lower incomes who are finding things difficult, either, as many of those earning around the national average indicated that they’ve been struggling too. Many have had to cut back on things like savings and pension contributions as a result, so the current crisis could have a long-term impact on the nation’s finances.
“If you’re struggling with rising costs, don’t be afraid to seek financial support. Speaking to Citizens Advice can be a good way of doing this, as they will be able to explain what options are available in your circumstances. Be sure to look after your mental health, too. Money worries can put a big strain on your wellbeing, so it’s worth speaking to your GP if things are beginning to get too much.”

“While it’s understandable that households will be looking for ways to cut back in the current climate, cancelling home insurance should be a last resort. Abandoning your cover could end up costing you more in the long run as you often have to pay a cancellation fee to do so, and you could be left short of funds if something is stolen or damaged.”