More than 5.6m people missed bill or loan payments in three of the last six months, as the cost of living crisis bites.
This number has risen by a third over this period, meaning an additional 1.4m people have now fallen significantly behind with credit payments according to latest figures from the Financial Conduct Authority’s latest Financial Lives survey.
In total the FCA found almost 11m people said they were struggling with bills, while a further 18.4m people say they feel “more anxious or stressed” about paying bills when compared to six months ago.
These figures have caused concern among those in the pension industry – who say that this also risks impacting people’s longer-term financial security, particularly if they stop longer-term saving in order to meet current financial demands.
Standard Life director for retail Dean Butler says: “Rising prices and borrowing costs have hit people hard in the past 12 months and are having a real effect on how people think about and manage their money. While not unsurprising, it’s still alarming to see the rise in financial vulnerability and how the continued impact of inflation and rising prices is chipping away at people’s financial resilience.
“The knock-on impact will undoubtedly affect people’s confidence and decision making both day to day and longer term. For many, ways of lessening the impact now such as dipping into rainy day savings may become increasingly unviable as limited funds run out. Other ways to cope such as cutting back on long-term savings are certain to have long-term consequences. A real concern now is that people end up dealing with the fallout from this unsettling time for years to come with depleted saving and underfunded retirements.”