A new study by the Money and Pensions Service (MaPS), commissioned for Talk Money Week 2023, has revealed that one in three UK adults have missed at least one key household payment this year.
From the total 3,016 people surveyed across the UK, 30% have reported missing on payments at least once in 2023, while 14% of them have had this happen to them for the first time.
Further details show that the most common type of bills that went unpaid were credit card repayments (11%), followed by Council Tax or rates (10%) and bank overdrafts or loans (8%). Additionally, 5% missed on rent and 4% on mortgage payments.
The data is being released to mark this year’s edition of Talk Money Week, which focuses on improving consumers’ financial wellbeing.
MaPS advises people who have missed payments to immediately look for free debt advice consultations to try and reduce any unwanted long-term effects on their financial situation.
However, results have shown that only a third of people (37%) would turn to this option. Most people (66%) prefer to cut back on essential spending (66%), 40% would ask family and friends for help, while one in four (23%) say they’d take out more credit to meet further expenses.
Charlotte Jackson, Head of Guidance at MaPS, said: “People are struggling this year and as these results suggest, some household budgets are becoming severely stretched. One in seven people currently wouldn’t take any action if they started to struggle and this increases their risk of becoming stuck in the trap of long-term problem debt.
“This Talk Money Week, we’re asking people struggling with payments to ‘do one thing’ and act fast. If you think you’ll miss one, speak to your creditor and if it’s already happened, it’s not too late to consider free debt advice. Acting now will help you get some control over what’s happening, find out your options and avoid the devastation that debt can cause.
“It can be really difficult to take that first step, but it can make a massive difference. If you’re unsure where to start, our free and impartial guide on starting the conversation is available now via our MoneyHelper service.”
Further advice was also provided by Steve Round, Co-Founder of data-driven core banking provider SaaScada, who said: “Once again, Talk Money Week has shown that financial institutions need to work on shielding vulnerable customers, particularly as inflation continues to bite.
“Over 16 million people have missed payments on key household bills this year, with 1 in 7 people doing so for the first time. Given that 8 November was Banking on Values Day, it’s a damning indictment on banks not having the data to prevent this by supporting their customers.
“To help provide customers with the best possible products during a time like this, FS firms need to develop more personalised products that serve a real need.
“To deliver this degree of personalisation, FS firms need granular, real-time insights into customer spending habits to better understand their needs and financial health. This shift is going to require many FS firms to re-architect how their core banking services are delivered, using cloud and automation to bring together data points and build a comprehensive view of every customer.”