Vast majority of adults see squeezed budgets

And a record proportion say they can’t save, according to a survey

ALMOST nine in 10 people saw their cost of living rise last month – and that’s before energy bills rocketed at the start of April. Some 87% of British adults who responded to a survey conducted between March 16 and 27 reported an increase in their cost of living – up from 62% in early November.

Among those who pay energy bills, more than two in five (43%) said they were “very or somewhat difficult to afford”.

That doesn’t even account for the energy price cap rise on April 1, which saw bills hiked by 54% on average.

The Office for National Statistics (ONS) survey has seen a gradual increase in recent months in the proportion of people saying their living costs have gone up.

Overall, the most common reasons given in March for people’s budgets getting squeezed were the price of food (88%), gas or electricity bills (83%) and fuel (77%).

Jack Leslie, senior economist at anti-poverty campaign group the Resolution Foundation, said a combination of shrinking pay packets and rising costs meant the pressure on households was building.

He added: “This is set to get worse, with the estimated number of households experiencing fuel stress hitting five million this month.”

Nearly one in four adults (23%) who responded to the survey in March said it was “very difficult or difficult” to pay their usual household bills compared with a year ago, up from 17% in November.

Around a third (34%) of renters said their rent has increased in the last six months, while a fifth (19%) of mortgage holders said their mortgage payments had gone up over the same period.

The ONS said that the lower proportion of mortgage holders reporting higher payments is likely to be due to some having fixed-rate deals.

Overall, 30% of those paying rent or a mortgage said it was “very or somewhat difficult” to do so, although only 3% said they were behind on payments.

Roughly one in six adults (17%) said they were borrowing more money or using more credit than they did a year ago.

Despite the cost of living crisis, this proportion has held relatively steady since November, which the ONS said could be down to people dipping into savings to cover bills.

Indeed, more than two in every five adults (43%) said they would not be able to save money in the next year.

That was the highest percentage to say so since the question was first asked in the survey in March 2020, at the outbreak of the Covid19 pandemic.

Hugh Stickland from the ONS said: “Today’s analysis shows nearly nine out of 10 adults tell us they have seen an increase in their cost of living over the last month.

“This is impacting on people’s financial resilience, with more telling us they are finding it harder to pay bills, and more unable to save money in the next 12 months.”