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Find free, independent and practical advice about caring for older people across the UK
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Financial distress among UK households has slightly eased over the last year. 30% of households are squeezed compared to 33% in September 2013. But 7% of consumers are experiencing the highest level of distress – having defaulted on a bill, loan or housing payment last month.
People in Scotland and the North of England are experiencing higher levels of financial distress on average. To see the level of financial distress in your local area see the Which? Financial Distress Map.
Headline inflation currently stands at 1.6% (CPI), however Which? analysis has found this differs for types of consumer.
According to the Which? Lived Inflation figures, the inflation rate (CPI) for consumers aged 65+ was significantly lower than people under 30. The inflation rate for over 65s was 1.3%, compared to 1.7% for the 18 to 29 age group.
This is mainly due to the impact of price rises in housing and utilities on younger households’ budgets.
How many people are cutting back spending on essentials?
The price of energy is the top worry for consumers with three in every four people worried about energy prices. 73% of consumers are worried about fuel prices. 68% are concerned about the price of food.
Top consumer worries
How many people think the UK economy will get better in the next year?
Four in ten households (41%) would find it difficult to cope with an unexpected major financial expense that would equate to a month’s income. Just three in ten (31%) say they would find it easy. This is approximately unchanged from last year (43% and 28%, respectively).
People on lower incomes are more likely to say it would be difficult to cope with an unexpected expense, like a car repair or boiler replacement. 60% of people on the lowest incomes say it would be difficult, compared to just 18% of people on the highest incomes.
The trend of growing optimism towards the economy continues with 26% of consumers now describing the economy as ‘good’ compared to 13% this time last year. However, when it comes to personal finances the proportion of consumers who describe their household finances as good is unchanged since last year.
UK consumers are more optimistic about the future of the economy -37% of households expect the economy to improve in the next year compared to 24% who think it will get worse (a significant improvement since last year). However, there has only been a small change in attitudes towards personal finances. 26% expect their finances to get better in the next year and 26% expect them to get worse, compared to 25% and 29% this time last year.