"In times of financial pressure, it’s understandable that many people are making tough decisions about where to cut back. But one of the risks of sacrificing savings or other financial priorities is that essential protections, like home insurance, can sometimes get overlooked"
- Nathan Blackler - Go Compare
12% of homeowners are having difficulty making their monthly mortgage payments, according to a new study into the ongoing impact of the cost of living crisis.
The new study found that 45% of homeowners with a mortgage state they feel worse off financially than a year ago, impacting their ability to keep up with essential bills and payments. Many feel the issue is exacerbated by increased interest rates and rising prices, with 32% feeling that the cost of living crisis is impacting them more than a year prior.
The research comes from the latest survey by Go.Compare Home Insurance, which gathered public experiences of the cost of living crisis and how it’s affecting their financial stability. The findings show that many Brits may be in need of monetary support, with a significant number being forced to make tough decisions when it comes to securing their future.
To manage the additional strain on finances, 40% of mortgage holders admit to scaling back on their savings, and a third have cut out or reduced entertainment expenses.
Half of 18-24-year-olds also say they are struggling to afford necessities like rent and utilities, the highest proportion of any age range, making them some of the most affected by the cost of living crisis. 36% of these adults also stated they feel financially worse off compared to last year.
One in 10 young adults have also reduced or cancelled their spending on home insurance, the most of any age group. An additional 11% have reduced or stopped putting money into their pension plans, also the highest percentage on the survey, along with 6% of those aged 25-34.
In comparison, 37% of 40-59s and 26% of those aged 60+ are struggling to pay for essential bills like rent, mortgage repayments and utilities.
Despite this, a larger proportion of older generations say they’re worse off this year than last year. Around 46% of those 60+ and 41% of 40-59s feel their financial situation is worse, showing that they’re also feeling the pinch.
The majority of Brits are still being affected by the cost of living crisis
Overall, a staggering 91% of Brits report that the cost of living crisis is still affecting their finances. While some are managing in the short term, a significant portion of the UK is sacrificing long-term financial stability by cutting back on essential savings.
A third have had to reduce or pause their savings contributions, putting longer-term goals aside to combat monetary strain during the cost of living crisis.
Some Brits have cut back on non-essential spending, with 30% reducing entertainment subscriptions and 19% cutting back on internet, TV, or phone packages. However, it’s clear that many UK households are being forced to make difficult choices between paying for daily essentials and investing in long-term financial security.
“In times of financial pressure, it’s understandable that many people are making tough decisions about where to cut back. But one of the risks of sacrificing savings or other financial priorities is that essential protections, like home insurance, can sometimes get overlooked," explained Nathan Blackler, home insurance expert at Go.Compare.
“While it may seem like a non-essential expense, not having the right coverage in place can leave individuals and families vulnerable if the worst were to happen. For instance, damage to your home, theft, or unexpected events like fire or flooding could leave you out of pocket without the right protection," he added
“If you’re already struggling financially, the cost of having to repair or replace damaged property can feel overwhelming and could lead to even more strain. With so many people cutting back on savings, it’s more important than ever to have a safety net in place should the worst happen. You can also consider seeking advice from the Money and Pensions Service to help with any financial difficulties you’re facing,” he concluded.
