TWO years of the cost of living crisis has caused a 50 per cent rise in the number of people who are pessimistic about their financial future, according to new figures released by StepChange Debt Charity.

The research indicates a difficult year ahead for people’s finances, as more than two in five adults (43 per cent), around 22 million people, say their household financial situation will get worse over the next 12 months. When asked a similar question at the end of 2021 – just prior to the start of the cost of living crisis – only one in four (28 per cent), around 14.5 million people, said they expected their financial situation to worsen over the following twelve months.

The new YouGov polling also reveals:

  • Of those who said their household financial situation would get worse over the next 12 months, three in four (74 per cent), around 16 million people, said this was because of energy bills going up in January
  • One in two (49 per cent) people are worried about their current financial situation
  • Almost one in two (46 per cent) people say their overall financial situation has got worse since two years ago. One in five (19 per cent) people say it has got much worse

Following two years of high living costs, keeping up with everyday expenses has become unsustainable for thousands of households. Of the one in two people worried about their finances, half have cut back on spending on essentials and a quarter (24 per cent) have borrowed money.

Despite so many people experiencing money worries, only four per cent of those who said they were worried about their financial situation have sought help from an independent organisation such as StepChange or Citizen’s Advice.

However, StepChange says it saw a steep rise in the number of people accessing debt advice on Christmas Day compared to the previous year. Almost 1,000 people accessed debt advice on StepChange’s website on 25th December, up from almost 400 on Christmas Day 2022, a 143 per cent rise.

Vikki Brownridge, CEO at StepChange Debt Charity, said: “January is always a busy time for us as a charity, and we know that it’s not just Christmas that has stretched people’s budgets this year, but almost two years of a long and challenging cost of living crisis.

“With energy bills having risen again, and the colder weather setting in, unfortunately the new year will not be easy on people’s finances. While we have seen a pause in the sharp rises in interest rates and inflation in recent months, the impact of this is far from over.

“For anyone struggling with debt or worried about what 2024 will bring for their financial situation, free and impartial support is available. StepChange offers confidential debt advice tailored to your personal circumstances. Opening up about your money worries can be the most important step in getting your life and finances back on track.”

* Source: StepChange Debt Charity