More than 80% of people have seen their living costs go up in recent months, prompting many to take on new debt and leaving many people struggling.
A survey of 5000 people carried out by TSB last month found that for the vast majority of the public, the cost of living crisis has already started to bite.
At a glance: 5 key points
- More than eight out of 10 people have seen an increase in their living costs over the past few months, according to TSB’s new research
- These increases in the cost of groceries, energy bills and day-to-day essential has led around a quarter of people to take from their savings, while a fifth have had to change their habits and a third have had to cut back on non-essential purchases
- This has also forced many people to take on increased debts, with just under a fifth of respondents reporting that they’ve taken on new credit, increased their existing credit limit or gone into their overdraft
- One in seven people said they are currently struggling, with the vast majority of those who said they were struggling being renters, at 83%
- Experts have been warning for some time about a cost-of-living crisis, which is predicted to peak in March/April as inflation peaks at the same time as new energy tariffs are set and tax increases come into effect
- This comes as the prime minister ruled out a suggested VAT cut on energy bills, which would help keep costs low as the height of winter approaches
What’s been said?
Mark Curran, customer banking director at TSB, said: “It’s clear that many people are concerned about the impact of bills going up and rising inflation.”
He said: : “It’s a bit of a blunt instrument and the difficulty is that you end up also cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way.”
During the EU referendum campaign Boris Johnson argued that “Fuel bills will be lower for everyone” if Britain leaves the EU.
He said at the time: “In 1993, VAT on household energy bills was imposed. This makes gas and electricity much more expensive. EU rules mean we cannot take VAT off those bills … The least wealthy are hit particularly hard. The poorest households spend three times more of their income on household energy bills than the richest households spend. As long as we are in the EU, we are not allowed to cut this tax.”