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June: Cost of living crisis financial justice tracker | News and features

 June: Cost of living crisis financial justice tracker |  News and features

New data has shown that rising prices are driving people in the UK to cut drastically on essential health care, which could affect their well-being in the long run.

One in five (19%) households postpone dental treatment due to cost concerns. A third (35%) could not afford a healthy, balanced diet at least once in the past month. A similar percentage (33%) report that financial worries cause them to sleep poorly at night and 35% say their financial situation worsens their mental health. Many (27%) also say that their financial situation worsens their physical health.

Researchers found the situation is particularly worrying for those classified as ‘serious financially distressed’ (9.6 million people in the UK live in such households). One in five of those experiencing serious financial difficulties have not eaten at least three full days in the past month. In this group, as a direct result of the need to economize to save money:

82% could not afford a healthy, balanced diet at least once in the past month 46% postpone dental treatment 19% avoid medical appointments 18% cannot afford medicines or medical equipment.

The Financial Fairness Tracker, commissioned by abrdn Financial Fairness Trust and analyzed by a team of experts from the University of Bristol, has been monitoring households’ personal finances since the start of the pandemic, using a sample of around 6,000 people .

To illustrate how hard the lowest income earners have been hit by the cost-of-living crisis, many indicators of well-being that affect physical and mental health are lower than they were at the start of the pandemic. Of those experiencing severe financial difficulties, 61% of households reported that they were unable to keep their home warm and comfortable in the past six months. Similar numbers said they reduced social interaction with friends and family (64%) and participated less in hobbies and pastimes (61%).

Researchers looked at which households are cutting back and in which areas they are cutting back. This leads them to describe cost cutting as ‘the new normal’, with only a quarter (26%) of households taking no measures to cut costs, while the majority are taking measures to cut costs in one or more areas. Of all households in the past six months:

49% have cut back on eating out and takeaways 46% shop at cheaper supermarkets/bought cheaper food products 35% have not booked a vacation or vacation.

Overall, financial well-being is lower than when the first survey took place at the start of the pandemic (April 2020). Since then there has been an 11 percentage point decrease in households that are financially secure (from 37% to 26% of households).

Professor Sharon Collard, Chair of Personal Finance at the Personal Finance Research Center at the University of Bristol, said: “The increasing food insecurity due to the rising cost of living cannot be ignored. The number of people who can’t afford to eat healthily, or even eat just three meals a day, is alarming. While the government has taken welcome measures to support those worst off, these figures show that more needs to be done to help; relying on food banks is not a viable long-term solution.”

Mubin Haq, CEO of abrdn Financial Fairness Trust, said: “The cost of living crisis is having a serious impact on the decisions millions are making about their health. It’s shocking that people routinely put off dental treatments, don’t take medicines, and don’t eat because they can’t afford these essentials. Short-term cost savings are likely to have long-term implications for the country’s health. This is a high price to pay and could have knock-on effects on the labor market, with people unable to work due to poor health.”

More information

abrdn Financial Fairness Trust

abrdn Financial Fairness Trust funds research, policy work and campaigning activities to tackle financial problems and improve living standards for people on low to middle incomes in the UK. It is an independent charity registered in Scotland.

abrdn Financial Fairness Trust was known as Standard Life Foundation until December 2021.

Financial justice tracker

The tracker is run by YouGov on a regular basis. People in Northern Ireland, Wales, England and Scotland are asked about their income, bill payment, borrowing, debt, savings and other financial changes, including their ability to afford essentials such as food. Respondents are randomly recruited from YouGov’s online panel. The basis for analysis are persons responsible for household finances. Non-households responsible only for their own personal finances (most were under 25 and living at home with their parents) are not included in the analysis for this report.

The tracker identifies the demographics and socio-economic conditions of who has been affected, as well as the strategies used by people affected by the crisis to make ends meet. It also indicates how much and what kind of people expect their financial situation to deteriorate in the coming months. The report covers the UK population as a whole, as well as the four individual countries of the UK. Within England, it identifies the regions where the impact was greatest.

The tracker monitors the level of anxiety arising from financial difficulties and the use of, as well as the possible need for, money counseling, debt advice or further support from the government or other agencies. The report identifies the numbers of people taking advantage of government assistance, such as the job preservation scheme and self-employment support, and those experiencing a drop in income who are not covered by any of these measures. It provides a regular picture of how the nation is responding to the economic shock caused by the crisis.

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