We present the findings from a survey undertaken in January 2024 to understand the financial impact of the increased cost of living on adults across the UK.
Consumers and the rising cost of living
We conducted the ‘Financial Lives cost of living (Jan 2024) recontact survey’ between 8 December 2023 and 28 January 2024, and 3,450 individuals responded. Where possible, we have compared these results to those from our similar survey in January 2023. All survey results have been weighted to be representative of all UK adults.
The financial services sector has a vital role to play in supporting people dealing with a squeeze on their income. We have set clear standards and expectations for how financial services firms should help customers in financial difficulty (including consumer credit, mortgage and insurance firms). These survey findings highlight examples of firms providing support to customers, and the benefit it can have.
We encourage anyone struggling to keep up with payments to contact their lender or insurance provider. Consumers can also visit MoneyHelper for useful advice on living on a squeezed income and to find free, expert debt advice.
Download the full Financial Lives cost of living (Jan 2024) report (PDF)
1. Summary research findings
Since January 2023 there has been an improvement in the number of people finding it hard to manage the higher costs of living, although challenges remain for some groups
The cost of living continues to have an impact on the financial lives of some adults in the UK. In January 2024:
- 7.4m (14%) felt heavily burdened by their domestic bills and credit commitments
- 5.5m (11%) had missed any of these bills in the previous 6 months
- 14.6m (28%) were not coping financially or finding it difficult to cope
- 5.9m (11%) had no disposable income
These results are an improvement on those recorded in January 2023, as shown in the figure below. However, they are worse than our historic data. For example, results from our 2020 survey, conducted before recent cost-of-living increases, found that just one in ten adults (11% or 5.8 million) felt heavily burdened by their domestic bills and credit commitments, with a similar proportion (10% or 5.2m) having missed paying one or more domestic bills or credit commitments in the previous 6 months.
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Data table
Base: All UK adults (2023:5,286/ 2024:3,450)
Questions: Q19/ K1 (Rebased)/ K2/K2asum/ Q21.
Note: The proportion of adults heavily burdened by their domestic bills/ credit commitments has been rebased to exclude ‘don’t know’ responses (3%/1%)
A higher proportion of adults in certain groups were struggling financially in January 2024, compared with the UK average. These included:
- adults from low-income households
- unemployed adults
- others not in work such as the long-term sick and full-time carers
- renters
- single adults with financially dependent children
- those living in the North of England and in the most deprived areas of the UK
These groups were also more likely to be struggling financially with the increased cost of living in January 2023.
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Data table
Base: All UK adults (2023:5,286/ 2024:3,450)
Question: Q19. Which of the following statements best describes how you are coping financially today?
Note: Where results are based on answers from just 50 to 99 respondents, we put the result in a square bracket to indicate the evidence is less robust.
Some people seek financial support and find it helps – but many adults who may benefit from support are not seeking it
In the 12 months to January 2024, 5% (2.7m) of adults sought help from a lender or from a debt advice or other financial support charity because they were in financial difficulty – of whom 46% (1.2m) considered that they were in a better financial position because of this support.
- Just 29% of those who had fallen behind on or missed paying their bills sought help
There was an increase in the proportion of struggling mortgage holders who asked their provider to reduce their monthly payments or provide a payment holiday: 0.4% did so in the 6 months to January 2023, rising to 1.6% in the 12 months to January 2024.
(Female, 25-34, renting, long-term sick or disabled, finding it quite difficult to cope financially)
People are spending less and saving/ investing less to make ends meet – but very few have stopped contributing to or reduced their pension contributions
In the 12 months to January 2024, 77% (40.5m) of adults spent less or worked more to make ends meet – although fewer reported this than did so for the 6 months to January 2023 (89% or 47.0m).
44% stopped or reduced saving or investing to make ends meet, while 23% used their savings or investments to cover day-to-day expenses: in total, 53% (27.6m) did either of these things in the 12 months to January 2024, vs. 56% in the 6 months to January 2023.
52% (27.5m) had cut back on the amount of electricity, gas or other heating fuel used to save money – vs. 71% (37.7m) who did this in the 6 months to January 2023.
48% (25.0m) had cut back on their food shopping to save money – vs. 55% (29.0m) who did this in the 6 months to January 2023.
3% (1.8m) had stopped contributing to a pension or reduced their contributions to make ends meet, and only 2% (1.1m) cashed in a pension fully or took out a lump sum to cover day-to-day expenses.
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Data table
Source: Financial Lives cost of living recontact survey (Jan 2023/ Jan 2024)
Base: All UK adults (2023:5,286/ 2024:3,450)
Questions: Q4/ Q5/ AT29D. In the last 6 months, have you done any of the following, due to the rising costs of living (Jan 2023)/ In the last 12 months, have you done any of the following, to make ends meet? (Jan 2024)
One in five adults cut back on insurance to save money or because they can’t afford it
22% (11.8m) of adults, in the 12 months to January 2024, cancelled an insurance or protection policy (6% or 3.2m), reduced their level of cover of a policy (6% or 3.1m), and/or chose not to buy a policy (12% or 6.4m), to save money or because they could not afford the premiums.
The increased cost of living continues to affect some people’s mental health – although there is some recent improvement in the numbers affected
In the 12 months to January 2024, due to the rising cost of living:
- 43% (22.7m) suffered anxiety or stress, an improvement on the 54% (28.4m) who felt this over the 6 months to January 2023
- 20% (10.4m) had suffered with their mental health, an improvement on the 24% (12.6) who felt this over the 6 months to January 2023
2. More information about the Financial Lives survey
Financial Lives surveys adults aged 18 and over across the UK. It provides extensive insight into consumers’ experiences with financial services providers, their financial situation and resilience, and the financial products they hold, among many other topics.
Our latest main survey – Financial Lives 2022 – was completed in May 2022 with 19,145 responses. Access to the data tables, questionnaire and report are available on our Financial Lives survey web page. The main Financial Lives 2024 survey is currently taking place.
From 6 December 2022 to 16 January 2023, we ran a short survey with respondents to our main Financial Lives 2022 survey. We got 5,286 responses. As the majority (68%) of these responses were completed in January 2023, we refer to this survey as our ‘Financial Lives cost of living (Jan 2023) recontact survey.’ We previously reported results from this January 2023 survey in a short research note and in Chapter 4 of our latest main report.
From 8 December 2023 to 28 January 2024, we ran another short survey with respondents to our main Financial Lives 2022 survey. We got 3,450 responses. As the majority (76%) of these responses were completed in January 2024, we refer to this survey as our ‘Financial Lives cost of living (Jan 2024) recontact survey.’ For both recontact surveys, we weighted these responses to provide nationally representative results.
The recontact surveys were designed to understand the financial impact of the increased cost of living on adults across the UK over the 6 months to January 2023 (ie more or less since our previous main survey in May 2022) and over the 12 months to January 2024, respectively. While many questions in the January 2024 survey also asked about the last 6 months, others were expanded to encompass the last 12 months. This was to capture developments since the 2023 survey. The 2024 survey also asks several new questions. We always mention the time period when we report results to ensure readers understand when results are not directly comparable, ie when they cover the last 6 months (January 2023) versus the last 12 months (January 2024).
We also asked some open questions around ‘what the rising cost of living means’ to consumers. This was to gather illustrative feedback on their experiences in their own words.