The director of Caritas Salford is calling for urgent government action, after figures published by the The Financial Conduct Authority (FCA) have revealed that the number of people struggling to meet bills and credit repayments has risen by 3.1m since May 2022 (10.9m, compared to 7.8m in May 2022).
Patrick O’Dowd has issued a stark warning that society is “starting to become desensitised” to the words ‘cost-of-living crisis’.
The FCA found that 11% of adults had missed a bill or loan payment in at least three of the previous six months, and is encouraging people to ask for help as household budgets were squeezed by the rising cost of living.
Energy, food and fuel prices have jumped in the last 18 months, putting pressure on personal finances.
Prices for most things have been rising and inflation, the rate at which prices go up, is at 10.1%, meaning goods are more than 10% more expensive on average than they were a year ago.
Researchers found that 29% of adults with a mortgage and 34% of renters had seen their payments increase in the six months to January this year.
The team also saw signs that some people had reduced or cancelled their insurance policies as a way of easing the pressure on their budgets.
The FCA said it had repeatedly reminded firms of the importance of supporting their customers and working with them to solve problems with payments and bills.
In response to the latest figures, Patrick O’Dowd, director of Caritas Salford, said:
“Hearing the new figures from the FCA that one in five people in the UK is struggling to pay bills and experiencing heavy financial burdens – up 40 per cent compared with May last year – is tragically no surprise to our charity.
“On the ground, we are seeing people who are increasingly struggling to make ends meet, many from families where both parents are working one or two jobs.
“Urgent action needs to be taken before this crisis deepens irreparably. People are almost starting to become desensitised to the words ‘cost-of-living crisis’. They are hearing it so many times – daily usually – in news reports and everyday conversation, that it has almost become something that no longer has a real-life meaning when many hear it.
“However, as a charity that supports people across Greater Manchester and Lancashire who are experiencing poverty, disadvantage, isolation and homelessness, we know the severity of these pressures on the lives of normal people is very, very real. Poverty and homelessness can happen to anyone at any time, and sadly demand for our services has arguably never been more acute.
“It’s 2023 and people can’t afford to eat every day. People can’t keep warm. People can’t afford bus fares to hospital appointments. People are sofa surfing as they have faced forced eviction from landlords who aren’t able to pay their mortgages.
“This is difficult physically but also mentally – people are plunged into outrageously difficult situations and often can’t see a way out, especially when decision makers and people in power are reporting that costs of everyday items and groceries look set to remain ‘stubbornly high’. There’s a huge risk that people can be forced into positions of debt to loan sharks or become victims of modern slavery and organised crime too.
“This has to stop. Talking about potential initiatives or offering people advice on debt management is okay, but we need to be addressing the issues which have led to them being in these untenable positions first and foremost before it’s too late. The time to act is now.”