Overview

The July 2022 Financial Impact Tracker has identified the biggest pressures on household pressures since the beginning of the pandemic.

It shows that single parents have seen the greatest decline in financial wellbeing, with the proportion in serious financial difficulties rising from 23% to 37%. Other groups particularly hit include social renters, private renters and households with two children (all with a rise of more than ten percentage points).

The only group seeing a reduction in serious financial difficulties was households earning over £100,000 per year. In addition to the 4.4million in serious financial difficulties, a further 20% are struggling financially. As a result, 36% of UK households are facing significant financial hardship (either in serious financial difficulties or struggling).

Key findings

Researchers found people were using a variety of methods to tackle rising energy bills, since the start of January 2022:

• 31% had reduced the number of showers/baths taken
• 60% had avoided turning on the heating
• 33% had reduced use of the cooker/oven
• 24% had heated only part of their home

The research shows some geographic variation in rates of households in serious financial difficulty. While overall 16% of UK households are in serious difficulties, this rises significantly to 22% for Wales, 21% for Scotland and 20% for the North East of England.

There is also an increase in stress and worry over household finances - nearly 6 in 10 are very/quite worried about their financial situation, especially disabled households (72%) and those on receiving or applying for benefits (77%). Looking to the next three months:

• Half of households are worried about their ability to meet their gas or electricity bills.
• Two in five are worried about their ability to cover food costs.
• 29% are worried about their ability to meet their housing costs (rent or mortgage).

About the research

abrdn Financial Fairness Trust has commissioned YouGov to conduct a periodic cross-sectional tracker survey on the financial situation of UK households since the start of the coronavirus pandemic in early 2020. The latest wave of this survey – conducted in May-June 2022 – gives insight into the nation’s finances as the pandemic gradually recedes from memory but new challenges emerge, such as the increased cost of living.

About the tracker

The findings are based on responses from 5,716 households about their income, payment of bills, borrowing, debt, savings and ability to pay for other essentials such as food. A team from the University of Bristol analysed the respondent data collected from YouGov’s panel and produced these findings.