Yahoo Finance Debt warning for almost 2 million households ahead of Christmas
An estimated 1.9 million UK households missed or defaulted on at least one mortgage, rent, loan, credit card or bill payment in the last month.
The most common type of bill missed was energy, at 2.3% of households, followed by council tax (1.9%), phone (1.6%) and broadband (1.4%), according to Which?’s Consumer Insight tracker.
Renters were more likely to miss a housing payment (6.4%), than mortgage holders (2.5%). Of those surveyed, 3.1% reported having missed a loan or credit card payment and 4.6% reported having missed a bill payment.
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“With 1.9 million households missing important payments in the run up to Christmas, we’re worried that many more people could be facing financial crisis in January – as the credit repayments pile up and the cost of living crisis continues to bite,” Rocio Concha, Which? director of policy and advocacy, said.
“As so many people face financial hardship, Which? is calling on businesses in essential sectors like food, energy and broadband providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis,” she added.
Which? research this time last year showed an estimated 1.7 million households missing at least one payment – but that number shot up to 2.5 million in January 2022.
The consumer body is concerned that these figures could repeat themselves again in the coming weeks as missed payment rates generally tend to be lower in the lead up to the festive period and peak in January – when many households need to pay back their Christmas expenses as well as their usual household bills.
Just under six in 10 (56%) people made at least one financial adjustment – such as cutting back on essentials, selling items or dipping into savings – in the last month to cover essential spending. This equates to an estimated 15.8 million households.
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This is an increase on the four in 10 (42%) seen this time last year, but lower than the peak of two-thirds (65%) making adjustments in September 2022.
Which? is urging consumers missing or struggling to afford essential payments – such as energy, credit card or mortgage payments – to speak to their provider immediately for help.
