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UK Households Struggle as Cost-of-Living Crisis Intensifies – Middle-aged Accumulate Debts, Young Seek Family Support, Poorer Resort to Extreme Measures

According to figures released recently by the ONS, 61% of the UK population cited concerns about climate change and the environment as being one of the most important issues facing the UK. 73% cited the economy, 87% the state of the NHS, but an overwhelming 93% nominated the cost-of-living crisis as being their number one concern.

On the cost of living in particular, 97% of people reported food price increases as being their main worry, while 73% said they were concerned about the cost of gas and electricity, and 40% stated it was the increase in the price of fuel.

With inflation remaining stubbornly high at 10.1%, and food and drink prices increased by 19.2% in the 12 months to March 2023 – that’s the highest rate in over 45 years – as the cost-of-living crisis continues, people of all age groups are struggling.

One of the biggest pressures on prices is the cost of fuel, with oil and gas being in greater demand as life gets back to more like normal post-Covid. That, and the ongoing war in Ukraine affecting the supply not only of oil and gas but grain too, have pushed prices up even further.

The UK population as a whole has had to develop different coping mechanisms to keep their heads above water.

Many low-income families and young people in the age group 18 to 24 have resulted in some instances of running up debts by not paying certain bills, with one in every five adults reportedly delaying paying at least one bill over the past three months.

According to a search from the resolution foundation, 25% of young adults aged 25 to 34 have, over the past year, looking for financial support from friends and family, while poorer individuals have been forced to resort to even more drastic measures such as reducing their food intake and falling back on food banks.

While some elderly and wealthier people have managed to remain relatively insulated, as the cost of living crisis continues, a significant number of people have had to resort to withdrawing money from their savings accounts in order to manage their finances.

According to the previously mentioned report from the Resolution Foundation, those without a savings cushion to fall back on. More than one in three middle-aged people have been forced to use their credit cards, dig into their overdrafts or try and organize other forms of loans in order to deal with the ongoing pressures of the cost-of-living crisis.

It’s not just financial worries, of course. Food insecurity is also having a detrimental effect on physical health. 30% of the adult population, which equates to approximately 16 million individuals, have reported declining health as a direct result of escalating prices and cutting back on certain healthy foodstuffs.

In addition to physical health, people’s mental health is also suffering. More than 40% of the UK adult population is exhibiting signs of poor mental health as well as emotional stress. It’s something that is more prevalent among the young. In March 2023, 52% of people aged between 25 and 34 said they were experiencing emotional stress.

The aforementioned survey carried out by the Resolution Foundation concluded that 14% of those interviewed felt more unhappy and depressed than usual during the period from December 2022 to March 2023. This figure rises to 19% when taking into account those who had to fall back on their savings and 29% for those who had bill arrears to cope with.

The fact that the cost-of-living crisis and financial insecurity are far from over is not good news. The Bank of England is predicting that inflation will quickly fall this year, but there is little sign of that happening at the moment. They say that an expected fall in the price of imported goods and the fact that people have less money to spend and will therefore have less demand for goods and services should mean that prices will not rise as rapidly as they have been doing.

However, the recent 0.25% increase in the key bank rate is not likely to be the last, and while it is expected that food prices should begin to fall, it is thought that energy bills will remain at twice the pre-crisis level for the rest of the year as government support will be scaled back.

Thinking ahead to next winter, more effective ways of heating your home are something you may need to start thinking about.