- Around 2.65 million report running out of food and not being able to afford more
- Households struggle with mortgages and rent, but many are yet to feel the full force of rate rises
- Younger adults far more likely to experience financial vulnerability
Laura Suter, head of personal finance at AJ Bell, comments on the latest ONS figures on the cost of living crisis:
“Renters and young people are feeling the brunt of the cost of living crisis, pushing more to become financially vulnerable. Young people have less financial resilience, meaning that even small financial hurdles can derail them. But sticky inflation, coupled with landlords passing on higher costs, means that young renters are being hit from both sides.
“With news today that the number of properties available in the UK has hit a 14-year low, it’s no surprise that rental prices are climbing. It means that on average renters are now handing over more than a fifth of their disposable income just to keep a roof over their head – and that’s before they’ve heated it, turned on the lights or paid council tax. It means that around four in 10 renters are now finding it difficult to pay their rent.
“The figures lay bare just how difficult some households are finding this drawn-out cost of living crisis, with around 2.65 million UK adults having run out of food and being unable to afford more in the past two weeks. The price of the food shop continues to be the biggest squeeze on household budgets, with 96% of people saying they were seeing the cost of their food rising over the past month. While supermarkets have offered some hope that prices will start to fall soon, that’s cold comfort to those who are struggling to afford the essentials now.
“What we’re seeing emerge is a split society: those who are facing higher rent or mortgage costs thanks to rising interest rates are far more likely to be experiencing financial vulnerability, compared to older and wealthier people who own their own home outright and so are protected from the negative effects of rate hikes.
“But while prices might start to ease, reducing some of the pressure on household finances, these figures highlight that many homeowners have more pain to come. Only a third of mortgage holders have seen their costs increase in the past six months, highlighting just how many people haven’t yet faced the gauntlet of rising mortgage rates. As more people roll off their fixed rate deals onto far higher costs, we’ll see those struggling to keep up with payments increase.”
