Nearly 2 million UK households behind on bill payments as Christmas approaches | UK cost of living crisis

As the cost of living crisis continues to ravage people’s incomes, it has emerged that almost 2 million households have defaulted on at least one major bill in the run-up to Christmas.

According to the latest findings from the Which? another bill in the last month.

Delinquency rates generally tend to be lower as the holiday season approaches and peak in January, when many households have to repay their Christmas expenses.

Which ? the data will be cause for concern at the boardrooms of financial and energy companies, as it suggests there could be a significant wave of defaults in the coming months.

This time last year reported that 1.7 million households had missed at least one payment on a major bill, a number that jumped to 2.5 million in January 2022.

As the UK slips into recession, mortgages and rents rise and the energy price guarantee becomes less generous from April, consumers will only face further financial pressures in 2023 , leading to more defaults, he warned.

Perhaps unsurprisingly, the most common type of missed bill was energy, at 2.3% of households, followed by council tax at 1.9%.

Overall, renters were more likely to have missed a housing payment. Of those surveyed, 3.1% said they had missed a loan or credit card payment.

Rocio Concha, which one? policy director, said: “We fear that many more people will face a financial crisis in January – as credit repayments pile up and the cost of living crisis continues to bite.

“As so many are facing financial hardship, Which? calls on businesses in essential sectors such as food, energy and broadband providers to do more to help customers get good deals and avoid unnecessary or unfair costs and fees during this crisis.

The Bank of England last week warned of “significant pressure” on households and businesses due to rising inflation and borrowing costs. Around 4 million households are expected to face higher mortgage payments in 2023, with the average monthly mortgage payment rising to £1,000 (from £750 previously), equivalent to around 17% of pre-tax income.

Earlier this month, the Trades Union Congress said 2022 had seen the biggest fall in real wages since 1977 and the second worst on record since 1945. Analysis of official statistics revealed that real wages fell in average of £76 per month in 2022 as a result. wages are not keeping pace with inflation.

A year ago the average household spent around £1,200 on electricity and gas bills; now that figure is £2,500. UK food price inflation hit a new high of 12.4% in November.

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