The cost of essentials needs to increase by just £128 a month to create financial hardship for UK adults with younger adults particularly concerned, according to data from LifeSearch.
The life insurance broker’s latest Health, Wealth and Happiness Index which surveyed 3,000 adults in the UK, showed that (12%) British adults said they were already struggling to meet their essensials.
On average, essentials needed to rise by just £128 per month for them to struggle, dropping to just £111 a month for women and £102 a month for younger people aged 18-34.
But the index also indicates it may not take long for many to reach their financial breaking point as the vast majority (73%) of respondents think they will be worse off financially in the months ahead – worse off on average by £342 a month, rising to £426 a month among younger people aged 18-34.
This is £90 more a month compared to when LifeSearch asked consumers the same question six months ago.
A fifth (19%) of all adults think about the cost of living and their finances multiple times a day – rising to 26% of those aged 35-44 – while a further 25% said it’s on their mind “daily”.
The survey also showed nearly one half (45%) of adults anticipated they may use the majority of their savings, rising to 62% of 18–34-year-olds.
Meanwhile a third (33%) will have significantly more debt – rising again to 49% of 18–34-year-olds.
A third (34%) thought they would be unable to pay for energy, again increasing to 49% of 18–34-year-olds, and 68% will turn the heating off when normally it is on.
A fifth (22%) anticipated they may be unable to pay their rent or mortgage (40% of 18–34-year-olds) and 17% will have to sell their home to release equity (42% of 18–34-year-olds)
One in three (34%) will struggle to pay for food (47% of 18–34-year-olds and 55% of those renting with local authority) and 31% won’t be able to afford to run their car.
More than a third (36%) of parents did not think they will be able to pay for childcare, and 60% said they will struggle to pay for things their children want/need this winter.
Commissioned with the Centre for Economics and Business Research (Cebr) and supported by consumer insights, the annual update of the combined LifeSearch Health, Wealth and Happiness Index reveals further falls over the last six months, with the index reaching 79.0 at the end of the third quarter 2022 (the lowest level in the series since Q1 2021).
The Happiness element of the index saw the biggest falls over this period (8.3 points down), reflecting the acceleration of the cost-of-living crisis and the period of national mourning for the passing of the Queen.
Emma Walker, chief marketing officer at LifeSearch, said: “The outlook for many people this coming winter is very stark. Huge numbers of people are financially vulnerable and any further rises to their cost of living may potentially push them to their limits.
“Our study has shown that many are anticipating some dire consequences this winter as almost one in two British adults expect to exhaust all their savings and one in three will struggle to pay for food, with a fifth expecting to use a food bank.
“It’s no surprise therefore to find that the nation’s health, wealth and happiness has fallen again on the last quarter as the cost-of-living crisis is not only hitting our wallets, but our health and happiness too.
“As a fifth of all adults think about the cost of living and their finances multiple times a day, it’s no surprise that it’s the key factor to why Brits’ mental health has also worsened in the last six months.”