[ad_1]
Struggle… households face a growing battle to make ends meet (Image: GETTY)
Three-quarters are worried about the state of the economy and 68 per cent are making cuts, figures by the Office for National Statistics (ONS) revealed. And more than half of UK households have slashed their use of energy in response to soaring inflation and the rising energy cap pushing up bills.
Eighty-two per cent of those aged 30 to 49 – who are most likely to be raising children and paying a mortgage – and 77 per cent of the 50-69 age group say they are worried.
And 70 per cent of people over 70 admitted they were feeling either worried or “very worried” about paying their bills.
Caroline Abrahams, of charity Age UK, said: “Our own analysis shows the brutal impact that rocketing prices are having on our older population.
“I’m astonished that the bad news about prices keeps rolling in, but the Government continues to sit on its hands.
“And from what we hear, many older people are surprised and disappointed too. There must be more that ministers can do to help.”
She added: “For older people on low fixed incomes, relying solely on their state pension and benefits, it’s a terrifying prospect, because there are simply no more cuts they can make.”
People earning less than £10,000 a year were the highest percentage who felt very worried, at 31 per cent, according to the ONS.
The new full state pension is £179.60 a week – £9,339,20 a year. People who reached state pension age on or before April 5, 2016, and are on the old system, receive just £137,60 a week.
Bestinvest personal finance analyst Alice Haine said: “Poorer households, such as those with a gross personal income of less than £10,000 per year, are ‘feeling very worried’ about their finances.
“For some, the reality is already much starker, with families ditching non-essentials to meet the bills, cancelling holidays, missing d bill payments – and some parents even skipping meals to ensure their children can eat.
“The fear is that these difficult decisions will only multiply when the impact from higher energy bills finally hits home later this year.”
Ms Haine warned: “Warmer temperatures in the summer months mean households don’t currently need to heat their homes, so the real blow will come in the winter months, just in time for the next energy price rise.”
Overall levels of worry tended to be similar despite different levels of income, but those earning over £50,000 were the least worried.
In its survey carried out between May 25 and June 5, the ONS said 52 per cent of people were using less gas and electricity at home, following major price rises.
It also noted an increase in the number of people spending less on food shopping and essentials, which jumped to 41 per cent of households from 36 per cent a fortnight ago.
The ONS report said: “Looking at other sources of dat ot pt data, we can see other evidence of people changing their behaviour, which could be related to the rising costs of living.
“Our economic activity and social change in the UK real-time indicators release showed that in early to mid-May 2022, UK credit and debit card purchases decreased by six percentage points, as measured by Bank of England CHAPS data with the previous week.
“OpenTable data also showed that seated diners decreased by 10 percentage points, while Google Mobility data recorded that people visiting ‘retail and recreation’ locations fell by three per cent.”
The figures come after Consumer Price Index inflation rose to nine per cent in April, with further rises expected this year.
Meanwhile, four in 10 people who say they are very worried about rising living costs are using their savings to plug the budget gap.
Tom Selby, head of retirement policy at investment firm AJ Bell, said: “There is nothing wrong with this – dealing with unexpected bills is what a rainy-day fund is there for.
“But it’s vital those draining their savings today have a plan in place to rebuild it when their financial situation brightens.”
COMMENT BY JAN SHORTT
The ONS cost-of-living figures do not surprise members of the National Pensioners Convention.
The feedback we receive shows they are struggling to make ends meet and are fearful of how much more costs will rise this autumn.
Contrary to much opinion, most older people must budget carefully.
Those living on the state pension, or perhaps a small work pension taking them just above the pension credit level, have no wriggle room.
They also spend a much larger proportion of their income on essentials like food, energy and rent. More are still paying mortgages.
Inflation is not as new to the over-75s as it is to the younger age groups.
However, even the most resilient are buckling due to unprecedented and still rising price levels.
All of this at a time when the “triple lock” to ensure annual increases in the state pension – already much reduced in real terms – has been suspended.
The figures come after Consumer Price Index inflation rose to nine per cent in April, with further rises expected this year.
Meanwhile, four in 10 people who say they are very worried about rising living costs are using their savings to plug the budget gap.
Tom Selby, head of retirement policy at investment firm AJ Bell, said: “There is nothing wrong with this – dealing with unexpected bills is what a rainy-day fund is there for.
“But it’s vital those draining their savings today have a plan in place to rebuild it when their financial situation brightens.”
52% are using less gas and electricity at home to save money 41% are spending less on food shopping and household essentials iact multiply impact bills the UK ity
Although the Government has announced emergency measures, they are not enough to cover the huge bills that are landing.
The one-off payments have been delayed, so do not relieve the pressure households are under today and tomorrow. Plus they do not take a long-term view of pensioner poverty, which is set to get worse.
The NPC has written to the Chancellor and energy regulator Ofgem suggesting measures which could help alleviate the situation almost immediately.
Firstly, reduce or remove VAT and unnecessary standing charges on energy.
And permanently increase the winter fuel allowance to £500.
Stop energy firms from charging higher tariffs for those who are not online, or who can’t use a direct debit, or who must use key-card meters.
These aren’t the whole answer but they might help as we wait for a long-term solution that brings pensioner poverty to an end.
- Jan Shortt is NPC General Secretary
[ad_2]
Source link
