11m struggle to pay bills

ONE in five people are battling to pay bills and meet credit commit- ments, the City’s watchdog has said.

The number is estimated to have risen by 3.1 million since May 2022, soaring from 7.8 million to 10.9 million by January.

The Financial Conduct Authority believes the toll of people who missed bills or loan payments in at least three of the last six months is up by 1.4 million – from 4.2 million last May to 5.6 million in January.

The figures come from more than 5,000 responses to a UK-wide survey of people aged 18 and over.

Researchers found 29 per cent of those with a mortgage and 34 per cent of people renting were hit with increases in the six months to January. Some were also cutting back insurance cover to ease the pressures – which could make them worse off if something goes wrong.

Eight per cent of those who had insurance and protection policies in spring last year said they had cancelled one or more.

Seven per cent reduced cover by January – and some did both.

The FCA urged borrowers to get help from lenders if they are struggling to keep up with payments.

It has reminded 3,500 lenders to support people in financial difficulty and told 32 to change the way they treated customers.

The regulator’s Financial Lives survey also found the cost-of-living crisis was affecting mental health.

Around 28.4 million Britons felt more anxious or stressed in January than six months earlier. Twenty-eight per cent said had lost sleep over money worries.

One woman said she used credit to pay for car repairs, home insurance and food shopping.

Another, who relied on oil to heat her home, had used all her savings just to fill her tank.

A mother said she had now taken her son off her car insurance.

One man cancelled his insurance, stopped social outings and was eating less to make ends meet. A woman was seeing less of her family because of the cost of driving long distances. She also stopped playing sport and going to clubs.

Just over one in 10 said they had put off dealing with financial matters, such as ignoring warning letters. Sheldon Mills, of the FCA, said: “If you’re concerned about your finances, you do not need to worry alone.

“We’ve told lenders that they should provide support tailored to your needs.And if you find yourself in debt or want to know more about how to manage your finances, free expert advice is available.”

He added: “We will continue to act quickly to make sure financial firms help their customers who are facing financial difficulty or are worried they might be soon.”

Meanwhile, a YouGov survey commissioned by HSBC UK found nearly eight in 10 people were looking for ways to slash outgoings.

Only three per cent knew they could contact their bank or building society to discuss their financial worries without it worsening their credit score.

According to HSBC’s mobile banking app data, customers have axed more than 200,000 subscriptions a month.