Financial wellbeing in May 2022
Households are continuing to be squeezed by rising prices, with 57% making an adjustment to cover essential spending in the last month and 7% missing a loan, credit card, rent, mortgage or household bill payment.
A fifth (21%) of consumers described their household financial situation as poor, with many describing difficulties in affording basics like food.
Many households await their council tax rebate, with 53% of those in our sample who believed they are eligible saying they had not yet received it.
Households remain under financial pressure
Financial difficulty levels remained similar this month, with the proportion having made an adjustment to cover essential spending having decreased slightly but not significantly to 57% from 59% in April. This compares to 38% in May 2021. Once again, cutting back on essentials and dipping into savings were the most common adjustments (37% and 26% respectively).
Again in line with last month, 7% of consumers had missed a housing, bill, credit card or loan payment in the last month. The missed payment rate has remained at or above 7% in all five months in 2022 so far, compared with just four times in the whole of 2021.
Increased financial pressures are affecting day-to-day life
Given the increased financial adjustment and missed payment levels observed throughout 2022, we explored the day-to-day impact of this on consumers. It is clear that financial difficulties are taking their toll on consumers’ general wellbeing.
A fifth (21%) of consumers said they were dissatisfied with their household’s standard of living in May 2022. This is a significant increase on the 13% who were dissatisfied a year ago. Furthermore, a fifth (22%) described their financial situation as poor, compared to 14% a year ago. Some of those in a poor financial situation described the impact on them, with many mentioning the impact of the increasing cost of living:
Many consumers reported having made changes to their behaviour in response to these price rises. In response to energy price rises, 32% of consumers said they had used less hot water and 16% reported having had fewer cooked meals. In response to food price rises, 11% of consumers reported having skipped meals, 8% had prioritised meals for other family members and 3% had used a food bank.
Many people have not yet received their council tax rebate
With so many households under major financial pressure, the Government has announced a large package of financial support. However, our poll shows that many people are still awaiting previously announced measures.
In April, the government announced a £150 council tax rebate for households living in council tax bands A-D.
Among our survey respondents, 17% said they were not eligible for the rebate. As intended by the policy, these individuals tend to have higher incomes and are also less likely to be in financial distress, with a missed payment rate of 4.3% compared to 8.9% among eligible households.
However, the award of rebates has been relatively slow in many cases. Of those in our sample who believed they are eligible for the rebate, 53% said they had not yet received it.
Missed payment rates were higher among eligible households who had not yet received the rebate (11.2%) than among eligible households who had (6.3%). This may reflect that local authorities have been quicker to pay out to those who pay their council tax by direct debit, but people more prone to periods of financial distress may be less keen to pay this way.
The fieldwork was conducted by Yonder on behalf of Which between 13th and 15th May 2022. A sample of 2,074 consumers was surveyed online and weighted to be nationally representative.
If you have any questions or would like to find out more, please email Sophie Beesley at firstname.lastname@example.org
Published on 31.05.22