Almost 4.5m British families face acute financial woes

LONDON • The number of British households facing acute financial strain has risen by almost 60 per cent since October and is now higher than at any point during the coronavirus pandemic, a survey has found.

Researchers at the University of Bristol estimated that 16 per cent of households, or 4.4 million, are in "serious financial difficulties" and a further 20 per cent are "struggling" to get by. The findings illustrate the growing toll being exerted by the worst cost-of-living crisis in a generation.

The squeeze is set to intensify in October, when another spike in energy bills is expected to see inflation top 11 per cent.

The pressure on the government to do more to help comes amid a period of political turmoil after Prime Minister Boris Johnson was forced to resign last week. In May, his government announced an extra £15 billion (S$25.2 billion) in cost-of-living support but calls are growing for additional aid to be announced well before a successor to Mr Johnson is chosen.

"Times are tough for everyone, but it's those on the lowest incomes who are particularly feeling the effects of rising prices," said Mr Mubin Haq, chief executive officer of the Financial Fairness Trust.

"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," he added. "A more comprehensive and longer-term plan is urgently needed to ensure living standards do not sink even further."

More than half of those polled for the Coronavirus Financial Impact Tracker consider their financial circumstances to be worse now than during the early stages of the pandemic.

When the same question was asked in October, only a third thought their situation had deteriorated.

The report published yesterday described the lengths many are going to in order to save money.

Of those in serious financial difficulty, 71 per cent have reduced the quality of food they eat, 36 per cent have sold or pawned possessions, and 27 per cent have cancelled or not renewed their insurance.

Steps to save on energy bills this year include bathing and cooking less, while more than a fifth of casual workers have stopped or reduced pension contributions.

Single parents, social renters and households with children are being hit hardest.

"It's particularly worrying that people are potentially storing up future financial problems for themselves," said Professor Sharon Collard from the University of Bristol.

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