12 May 2022

Cost of living crisis to get worse in the coming months

4 min read

Sarah Pennells, consumer finance specialist at Royal London, responds to the research from YouGov and the Centre for Economics and Business Research (CEBR) showing that confidence in household finances has hit an all-time low.

“Our cost of living research shows that people are already cutting back their spending on food, fuel and energy bills, with only one in ten people saying they weren’t planning any cutbacks. While those on the lowest incomes will spend a bigger percentage of their income on household expenses, we found that people across all income bands were worried about higher energy bills.

“With talk of inflation hitting ten percent, interest rates rising further and the energy price cap likely to rise sharply again in October, it’s not surprising that people’s confidence about their finances has slumped. We know that an increasing number of people are making difficult choices – not just about buying cheaper brands in the supermarket and turning the thermostat down but, in some cases, going without food or heating altogether. That’s only likely to get worse in the coming months.”

Background

Royal London’s research on the cost of living found:

  • 95% of UK adults are concerned about the rising cost of living, with households across the earnings spectrum worried – as much concern among those with six-figure incomes as lower-earners
    Energy bills (92%), food shopping (87%) and cost hikes to phone and internet contracts (84%) are causing the most concern
  • Worryingly, a fifth (21%) of people plan to borrow their way out of trouble, with 7% admitting they simply don’t know how they’ll cover increases and 5% saying they’re considering a short-term (payday) loan
     

-ENDS-

Notes to Editors

  1. Information on how to manage money during these challenging times can be found on Royal London’s Cost of Living Hub 
  2. Royal London commissioned a survey by Opinium between 25 February and 1 March 2022 with a sample of 4,000 nationally representative UK adults.

For further information please contact:

Meera Khanna, Senior PR Manager

About Royal London

Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £150 billion, 8.8 million policies in force and 4,262 employees. Figures quoted are as at 30 June 2022. Learn more at royallondon.com