Households’ financial wellbeing is at its lowest point in two years, as the surging cost of living hits people’s ability to save, according to a Scottish Widows index.
The index, which measures households’ overall perceptions of financial wellbeing, fell to an overall score of 38.5 in the first three months of 2022. Readings above 50 in the index indicate an improvement and those below this mark are a sign of a deterioration.
This latest score is the lowest recorded since early on in the coronavirus pandemic in the second quarter of 2020, when the score was 37.8.
It comes amid rising energy bills, an increase in council tax, a jump in transport costs and a 1.25 percentage point national insurance hike to help pay for health and social care.
Emma Watkins, managing director of retirement at Scottish Widows, said: “It’s tough right now for households. We know that many households have failed to boost their savings during the pandemic (60%) and that over 70% of households will need to eat into their savings in the next 12 months in order to meet their growing expenses.”
WHAT FINANCIAL HELP IS AVAILABLE?
Data from Scottish Widows points to a rapid decline in the amount of cash UK households had available to spend during the first quarter of the year as higher living expenses bit into disposable income.
In general, and unsurprisingly, only the highest earners were able to add to their savings pots during the latest quarter. Meanwhile credit card borrowing has hit a high of £.15bn. People aged between 25 and 54 have reported the strongest rise in demand for credit.
It’s crucial to be aware of financial help available. There are grants and state benefits to help with energy costs. There’s a one-off £150 council tax rebate that the majority of households will benefit from.
There are also ways to trim your outgoings such as switching to a SIM-only mobile phone deal, tips to cut your food shopping bill, tricks to reduce your travel costs and remortgaging.
If your circumstances have changed, you could be missing out on vital benefits worth thousands of pounds. Take a look at the Turn2Us benefits calculator to check. According to Turn2Us, millions of households are not claiming benefits they are entitled to.
Additional reporting by PA
-
-
Energy price cap could be adjusted every three months to help manage costs, says regulator
Ofgem plans to update the energy price cap every three months rather than every six. Here’s what it means for your gas and electricity bills.
-
How to apply for the £5,000 Boiler Upgrade Scheme
Looking to upgrade your boiler to an eco-alternative? Here’s how to get £5,000 grant to help with costs as applications open this month
-
Brits buy less food amid cost of living crisis
Households are cutting back on food purchases as costs soar, official stats show
-
What is a will?
Ever wondered what a will is and why you need one? Our handy guide explains it all
-
How to claim a work uniform tax rebate
If you wear a uniform for work, then you could be entitled to some money back
-
Queen’s speech 2022: how it affects you
New bills will help strengthen the economy, but no immediate plans to help with the cost of living
-
Klarna to report customers to credit rating agencies
Warning: If you’ve used BNPL for online purchases, it will go onto your credit file. Here’s how you will be affected if you use Klarna
-
Council Tax: The Disabled Band Reduction Scheme - how it works
If you, or someone you live with is disabled, you may be able to claim a reduction on your council tax. Here’s what you need to know
-
£17 million of unspent Tesco Clubcard vouchers expire in May
How to use your Tesco Clubcard vouchers before they expire in 4 weeks
-
Holidaymakers lose nearly £3,000 to scams, bank warns
Fake flights, hotels and caravans leave holidaymakers out of pocket by thousands of pounds. Here's what to look out for and how to stay safe from holiday scams
