Missed bill payments at alarmingly high levels

Millions of households are struggling to get their finances back on track post-festive season, according to the latest findings from the Which? Consumer Insight Tracker.* 

It found an estimated 2.5 million households missed or defaulted on at least one mortgage, rent, loan, credit card or bill payment in March 2023 - a rise compared to January, when missed payments typically peak.

With increases to many household bills due in April, we reveal what you can do to keep costs down and tell you where to find help if you are struggling.

Missed payments remain high

Missed payments on bills tend to be high in January following Christmas, but the rate normally subsides in February and March.

However, the latest findings from the Which? Consumer Insight Tracker reveal the rate remains stubbornly high.

It found 8.8% of households missed or defaulted on a payment this month, compared to 8.2% in January and 8.1% in February. 

It’s rare for the rate to remain so high for multiple months. 

'I'm borrowing from my family'  

Six in 10 of the households surveyed have made at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines this month. 

Adjustments include cutting back on essentials, dipping into savings and selling possessions or borrowing. This is consistent with the levels we’ve seen for the past few months. 

Those who took part in our survey say they have had to put bills on hold and borrow from their family to make ends meet. 

A 49-year-old man from the south west of England said: ‘I’m finding that I am spending more than I have incoming. I’ve had to put some bills on hold and have had to cut my spending on groceries. I’m also borrowing from family from time to time.’

A 51-year-old man from the south east of England also explained: ‘It is a struggle to pay bills and afford food. There is no money for anything but the essentials and sometimes not even enough for those. This is making me miserable all the time and making my mental health even worse.’

• Find out more: how to spend less at the supermarket

Will finances improve in the next 12 months?

More than half of those we surveyed said they believe the UK economy will get worse over the next 12 months, compared to just one fifth who thought it would get better.

During the 2023 Spring Budget Jeremy Hunt revealed the Office for Budget Responsibility (OBR) believes the UK will avoid a technical recession this year, despite previous predictions. 

However, the OBR said that real households’ disposable income per person would fall 5.7% over two financial years (2022-23 and 2023-24), which is the largest two-year fall since records began in 1956.

• Find out more:  April price rises: how to keep costs down as bills go up

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What to do if you're struggling to make payments

Many consumers will face painful hikes come April as household bills across energy, broadband, mobile, water and council tax rise. 

Some are also facing a rise in mortgage payments due to the rise in the Bank of England base rate, which may additionally be passed on by landlords to tenants. 

Here is some advice if you’re struggling with payments right now. 

Energy bills

Although the government kept the Energy Price Guarantee at £2,500 and has removed the pre-payment meter penalty, most households will still find April’s monthly bill more expensive.

This is because the government’s Energy Bill Support Scheme, which has seen most households receive an additional £67 a month towards their energy bills, will finish at the end of March. 

If you’re struggling to keep on top of your bills, you should contact your provider. 

If you’re in debt to your energy supplier, you might be able to get a grant to help pay it off. Check out the Citizens Advice site for a full list of grants available.

It's also worth searching if there is energy help available from your local council, via their website.

You may be able to get extra help and support from your supplier by signing up to the Priority Services Register. You can sign up if you’ve reached state pension age, you’re disabled or sick, or your energy network considers you vulnerable.  

• Find out more: 10 ways to save on energy bills

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Rent and mortgages

Many households may face increased mortgage payments after the Bank of England announced on 23 March that it was raising the base rate to 4.25%.

If this means you’ll struggle to make your repayments, you should contact your lender in the first instance.

Your bank might be able to offer support measures such as temporarily reducing payments or extending the term of your mortgage.

Our guide on what to do if you can't pay your mortgage outlines what support might be available and provides a list of charities that offer independent advice.

Rate rises might also be passed on to tenants by private landlords. If this change or other costs rising means you can't pay, check out our guide on what to do if you can’t afford your rent.  

• Find out more: Bank of England raises base rate to 4.25%

Credit cards and loans

If you’re struggling to keep up with your credit card payments, you may be able to switch to a 0% balance transfer credit card.

This would move all your debt onto just one card that’s interest free for a set period of time, although you would need to keep making the minimum repayment each month. 

However, if you’ve already missed a payment it will show up in your credit report and it may impact your eligibility for a new credit card. In this case it’s best to speak to your lender as soon as possible. 

The Financial Conduct Authority has written to more than 3,500 lenders and told them the standards they should meet to help consumers that are impacted by the cost of living crisis. 

This means they must improve how they treat consumers in vulnerable circumstances and direct those who need money guidance or free debt advice. 

• Find out more: how to pay off your debts

Debt advice contacts

If you are consistently struggling with debts and not meeting repayments, a debt adviser could help you get your finances back on track.

Our guide on free debt advice contacts lists all the national organisations that offer free, impartial help and advice.

How Which? is helping with the cost of living crisis

Which? is calling on essential businesses – such as supermarkets, energy and telecoms providers – to ensure that they step up and help people as much as possible during the cost of living crisis.

Rocio Concha, Which? Director of Policy and Advocacy, said it’s important these businesses are doing ‘everything in their power to support consumers’. 

• Find out more: cost of living news and support

*The Consumer Insight Tracker is an online poll conducted monthly by Yonder on behalf of Which?. It is weighted to be nationally representative with approximately 2,000 respondents per wave.