Wales hit hardest by cost of living crisis with almost a quarter of households in ‘serious financial difficulty’
Wales has been hit hardest by the cost of living crisis with almost a quarter of households in “serious financial difficulty,” new research has revealed.
22% of households in Wales have resorted to cost cutting measures such as buying lower-quality food, selling possessions and cutting back on showers to make ends meet, a report says.
That compares with 16% of UK households overall in serious difficulties, with Wales in first place ahead of 21% in Scotland and 20% in the North East of England.
Abrdn Financial Fairness Trust and the University of Bristol found that across the UK 4.4 million households are now struggling.
“This is the first substantial deterioration we have seen since tracking people’s finances when the pandemic started,” said Abrdn Financial Fairness Trust boss Mubin Haq.
“Wages have largely stagnated and are no longer keeping pace with inflation; and social security is lower in real terms than it was over a decade ago.
“A more comprehensive and longer-term plan is urgently needed to ensure living standards do not sink even further.”
The cost-of-living crisis is hitting some groups harder than others. Single parents, renters and parents with two children are facing the greatest rise in financial difficulty, the research found.
Experts warn government support measures – like the £150 council tax rebate announced in March – may not be reaching those who need it the most.
The survey found a similar proportion of households in serious financial difficulties reported receiving the rebate as those feeling financially secure, at 40% compared to 41%.
“Times are tough for everyone, but it’s those on the lowest incomes who are particularly feeling the effects of rising prices,” Mr Haq said.
A UK Government spokesperson said they were taking measures to help the poorest families.
“We understand that people are struggling with rising prices which is why we have acted to protect the eight million most vulnerable British families through at least £1,200 of direct payments this year with additional support for pensioners and those claiming disability benefits,” they said.
“Through our £37 billion support package we are also saving the typical employee over £330 a year through this month’s National Insurance cut, allowing people on Universal Credit to keep £1,000 more of what they earn and cutting fuel duty by 5p – the biggest ever cut to fuel duty rates which saves a typical family £100.”
The tracker is carried out on a regular basis by YouGov. People in Wales, Northern Ireland, England and Scotland are asked about their income, payment of bills, borrowing, debt, savings and other financial changes, including their ability to pay for essentials such as food.
The survey of around 6,000 people between May 25 and June 6 shows the real-world impact on living standards as wages fail to keep pace with the rate of inflation, squeezing hard-pressed families.
Many families lost household income during the pandemic as they changed jobs, were made redundant, or had to take furlough.
Despite this, the hit to households in recent months has been worse, the survey suggests.
Households earning more than £100,000 a year were the only group who did not report an increase in serious hardship.
It shows that soaring inflation is hitting lower and middle-income families the hardest.
Most respondents are trying to tackle rising energy bills. Some are reducing the number of showers and baths they take and others are using the oven less.
Three fifths of respondents said they had avoided turning on the heating while a quarter (24%) said they heated only part of their home in efforts to cut costs.
While 71% said they have reduced the quality of food they eat, over a third (36%) have sold or pawned possessions and 27% have cancelled or not renewed insurance policies.
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