42% of families with children ‘may take on extra debt due to energy costs surge’
10 March 2022, 00:04
A third of families with children said they had struggled to pay household bills over the previous week, comparethemarket.com said.
More than two-fifths (42%) of families with children living at home are expecting to take on additional debt to deal with soaring energy bills, according to a financial confidence tracker.
A third (33%) of families with children said they had struggled to pay their household bills over the previous week, according to the research carried out in mid-February.
And nearly a fifth (19%) of people without children at home think the energy costs crisis will push them into further debts.
Alex Hasty, director at comparethemarket.com, said: “Many households are facing a significant increase to their outgoings and could be pushed into debt.”
Around a third (32%) of households with children at home are not confident about meeting their financial obligations in the coming weeks, with one in five (21%) households without children feeling the same way.
Comparethemarket’s findings also suggest there has been no significant improvement in overall financial confidence during the course of the coronavirus pandemic.
In April 2020, when the UK was under strong pandemic restrictions, 31% of families with children at home said they were concerned about meeting the demands of household bills.
Of those who have a mortgage, three-fifths of households (61%) with children at home are worried that rising interest rates will impact their ability to manage and pay for future household bills, compared to 44% of households without children.
More than half (56%) of people said they feel more pessimistic about their finances compared with this time last year.
Only a third (33%) feel more optimistic. Rising energy costs, general living costs, food costs and fuel costs were among the main reasons behind people feeling downbeat, with rising insurance costs also a factor, the survey found.
More than half (52%) of people are trying to cut back by eating out less, the survey found, while 45% said they are buying fewer new clothes.
And nearly half (45%) are reducing their rainy day savings contributions.
More than 2,100 people were surveyed across the UK from February 18 to 20.
