The financial pressures on UK households have reached unprecedented levels in 2025. With the rising cost of living, increasing energy bills, and higher borrowing costs, many families are struggling to make ends meet. Despite government interventions and wage growth in some sectors, disposable income remains stretched, leaving millions vulnerable to financial distress.
A study by the Money Advice Trust conducted in June 2024 found 13% of UK adults – equivalent to 6.8 million people – say they are struggling to meet day-to-day costs.
Why Are UK Households Struggling?
Several key factors have contributed to the financial strain experienced by households across the country:
Rising Cost of Living
- Inflation remains stubbornly high, driving up the cost of essentials such as food, housing, and transportation.
- Grocery prices have increased by an average of 8% year-on-year, making it harder for families to afford healthy meals.
Soaring Energy Bills
- Although energy prices have stabilized compared to the extreme spikes of previous years, households are still paying significantly more than pre-crisis levels.
- Many families have had to choose between heating their homes adequately and covering other essential expenses.
Higher Interest Rates and Debt Repayments
- Interest rates remain elevated, making mortgage repayments and credit borrowing more expensive.
- Unsecured debt, including credit cards and personal loans, has surged, with many households relying on borrowing to cover everyday costs.
Wage Stagnation and Job Insecurity
- While some sectors have seen wage increases, many workers have not experienced pay rises that keep pace with inflation.
- Rising redundancies in certain industries have left families struggling to maintain financial stability.
The Impact on Everyday Life
The financial strain is taking its toll on households in various ways:
- Increased reliance on food banks: More families are turning to charitable support as grocery costs remain high.
- Rising rent and mortgage arrears: Missed payments are becoming more common, putting people at risk of eviction or repossession.
- Mental health struggles: The stress of financial hardship is leading to increased cases of anxiety and depression.
Practical Steps to Manage Financial Struggles
If you’re feeling the pressure of rising costs, there are steps you can take to ease the burden:
Budgeting and Expense Tracking
- Reviewing spending habits and cutting non-essential expenses can free up extra cash.
- Using budgeting apps can help track and manage income and outgoings more effectively.
Debt Management Solutions
- If struggling with repayments, consider speaking to a debt advisor about debt consolidation or structured repayment plans.
- Avoid high-cost credit options that could lead to a deeper financial hole.
Seeking Financial Support
- Check eligibility for government assistance schemes, such as Universal Credit top-ups or energy bill discounts.
- Charities like Citizens Advice and StepChange offer free financial guidance and support.
The Road Ahead
With an estimated 7 million households facing financial distress, proactive money management and seeking expert advice are more important than ever. While challenges remain, the right support and planning can help families navigate these difficult times and regain financial stability.
If you need expert debt advice or tailored debt solutions, our team is here to help.
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Source: https://moneyadvicetrust.org/wp-content/uploads/2024/09/Money-Advice-Trust-Broken-Budgets.pdf
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