Number of missed payments already at winter levels

The number of households missing essential bills has risen to 2.4million – a rate not see since the height of the winter, according to a study by Which?

The number defaulting on essential payments, such as mortgage or rent, utility or loans and credit cards, has grown significantly since May. It is now in line with the high numbers of missed payments last winter.

The study revealed 770,00 people failed to make a mortgage or rent payment - with one in twenty renters and one in thirty mortgage holders defaulting on a payment.

Almost six in 10 households (59%) – or 16.7 million – said they had made at least one adjustment, such as cutting back on essentials, dipping into savings, selling possessions or borrowing to cover essential spending in the last month.

January is usually the month when the highest number of households miss a payment as the cost of Christmas takes hold. The number defaulting last winter was especially high because of soaring energy prices.

The figure for missed payments dropped slightly in May and June but has now started to rise again.

This shows that the cost-of-living crisis is continuing to bite into household finances, even in warmer weather when energy costs are lower.

Households aren’t confident about the future either. Less than a fifth (17%) said they think their household situation will get better over the next 12 months, while four in 10 (37%) said they think it’ll get worse.

 

What should you do if you’re struggling to pay bills?

If you’ve missed a bill or are struggling to find the money to make repayments, you should contact the organisations you owe money to immediately. They might let you pay smaller amounts or take a break from payments. Each organisation is different so it’s important to check what help you could get.

You should sort out energy bills, council tax and housing costs first as these are classed as ‘priority’ and failure to pay could have more serious consequences than things like credit cards or loans.

Never ignore bills or letters about money you owe as they could lead to more charges, impact your credit score, or result in court action.

 

When should you get debt advice?

You should get free debt help if you have lots of debts and are struggling to pay bills, especially those that are a priority.

You’ll need to find the best solution for you. That’ll depend on:

• The type of debt you have
• The amount of debt you have
• How much money you can pay towards your debts
• Your employment and homeowner status  

If you need more help understanding the different options, please get in touch. We offer free debt advice and can help find the best debt solution for you.