An estimated 700,000 households missed a housing payment in the last month, new Which? research suggests, as the consumer champion calls on essential businesses to do more to support people through the cost of living crisis.
Missed housing payments were particularly high among renters – with one in 20 (5.2%) renters surveyed missing a payment in the last month. Missed rent payments have stayed at a high rate throughout the last year, showing many are struggling to keep a roof over their head.
A significant number also missed mortgage payments in the last month – 3.1 per cent of mortgage holders surveyed – as Bank of England interest rates continue to climb.
Worryingly, overall 2 million households missed or defaulted on at least one mortgage, rent, loan, credit card or bill in April. The 7.3 per cent missed payment rate observed is in line with the level seen at the same time last year, but higher than in April 2021 (6.5%) and April 2020 (5.2%).
Bills remain the most common type of missed payment among the population as a whole (4.4%) – with energy bills most commonly missed (2%), followed by council tax (1.6%).
Six in ten (59%) households reported making at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. This equates to an estimated 16.6 million households.
Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. This is consistent with the high adjustment level seen for the past year, and matches the level seen in April 2022, but is much higher than the 35 per cent seen two years ago.
With the Bank of England predicted to raise interest rates again next Thursday, consumers will continue to face financial pressures throughout 2023. If people are missing or struggling to afford essential payments – such as energy, credit card or mortgage payments – then they should speak to their provider immediately for help.
Which? has also launched a campaign calling on essential businesses – energy firms, broadband providers and supermarkets – to do more to help consumers struggling to make ends meet and ensure they are providing value for money.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“It’s very worrying that so many households are missing housing payments. We’d encourage anyone who’s struggling to seek free debt advice and reach out to their mortgage provider or landlord for help.
“As so many people face financial hardship, Which? is calling on businesses in essential sectors like food, energy and telecoms providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis.”
Notes to editors
Which? cost of living campaign
The consumer champion is launching a campaign calling on businesses in essential sectors – supermarkets, telecoms and energy – to do more to help their customers through the cost of living crisis. More information on the campaign is available here.
Which? advice if you’re struggling to pay your bills
If households are struggling to afford their mortgage, they should speak to their lender as soon as possible. Lenders should be understanding if income levels have changed – for example, because someone has lost their job – and may offer a payment holiday, extending the term to lower the monthly payment or a temporary switch to interest-only repayments. Renters should speak to their landlords about their situation and ask if they are able to offer temporary help. More information here and here.
Consumer Insight Tracker
The Consumer Insight Tracker is an online poll conducted monthly by Yonder on behalf of Which?. It is weighted to be nationally representative with approximately 2,000 respondents per wave.
Which? estimates that between 1.8 per cent and 3.2 per cent of households missed or defaulted on a housing (mortgage or rent) payment in the last month, with an average estimate of 2.5 per cent. Based on the survey and the ONS estimate for the number of households in 2020 of 28.1 million, this scales up to between 510,000 and 890,000 households missing a housing payment in the last month, with an average estimate of 700,000.
Which? also estimates that between 6.1 per cent and 8.4 per cent of households missed or defaulted on a housing, bill, credit card or loan payment in the last month, with an average estimate of 7.3 per cent. This scales up to between 1.7 million and 2.4 million households missing a housing payment in the last month, with an average estimate of 2 million. April’s missed payment rate is lower than the 8.8% recorded in March, but the difference is not statistically significant.
The survey indicates that between 57 per cent and 61 per cent of households made an adjustment to cover essential spending in the last month, with an average estimate of 59 per cent. Based on the survey and the ONS estimate for the number of households in 2020 of 28.1m, Which? estimates that between 16 million and 17.2 million households made an adjustment to cover essential spending in the last month, with an average estimate of 16.6 million.
Figure 1: 7.3% of households said they had missed a payment in the last month in April 2023
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. The chart shows the proportion of households who have missed a housing, bill, loan or credit card payment in the last month.
Figure 2: Six in ten households made at least one adjustment to cover essential spending in the last month
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. Adjustments include: cutting back, dipping into savings, borrowing from friends and family, taking out credit cards or loans, selling items, using an overdraft.
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