A recent announcement from the chair of the Royal College of GPs has revealed that ill patients are refusing to accept sick notes from their GPs as they cannot afford time off work amid the rising cost of living.
These worrying revelations seem to be further verified by statistics in a brand new report from personal finance experts at NerdWallet, which revealed that over two-fifths (44%) of UK consumers are more concerned about the cost of living and rising energy bills (39%) over their physical well-being (24%) and mental health (22%).
With the results of the report indicating that school leavers and students as young as 18 are currently living in debt, the poll asked consumers of different age groups to give a breakdown of the amount of money they owe.
The report also discovered that 24% of those surveyed stated their biggest financial concern over the next 12 months is paying for heating and electricity, compared to just 6% whose biggest worry is being able to afford Christmas and holiday gifts for loved ones.
Cost of living
As a result of the continuing cost of living crisis, UK households are cutting back where they can, and are instead prioritising household bills and groceries.
The research found that Gen Z’ers, aged 18 to 24, are accumulating different levels of debt. While just over one-fifth (21%) claim to have £600 to £700 worth of debt, 1 in 8 (12%) owe £700 to £800, and almost one in six (13%) are already carrying more than £1,000 worth of debt, despite their young age.
Taking a look at the larger amounts of debt held by older age categories, almost 1 in 3 (31%) millennials, aged 25 to 34, state their debt totals less than £500.
What’s more, 1 in 5 (20%) millennials and over a third (35%) of those aged 35 to 44 claim they currently owe between £1,000 and £10,000.
Unsurprisingly, results indicated that those aged 65 and over are struggling the least with debt, with almost half (49%) owing less than £700.
Heat now, stress later?
With many are concerned about the rising cost of living and whether they will be able to afford their essential outgoings this winter. UK consumers seem to be split when it comes to what concerns them most about their debts, with almost half (47%) of respondents currently in debt saying that the cost of living is their biggest worry, while 41% highlighting that energy bills are their main concern.
While just under a quarter (24%) of Brits polled are worrying about paying for heating and electricity over the next 12 months, 49% of those aged 55 to 64 and 40% of those aged 65-plus disclosed that it was among their biggest concerns at the moment.
As well as this, the Report reveals what UK consumers are most commonly using borrowed money for during the ever-increasing cost of living crisis.
It has been revealed that just under a third (31%) of consumers aged 35 to 44, and 29% of those aged 18 to 24, admit to borrowing money to pay for groceries. About half that amount, 15%, of those aged 25 to 34 say they bought groceries on credit.
Gen Z Brits are feeling the biggest financial impact
More than half (53%) of those aged 18–24 admit they have had to cut back on costs, or missed essential payments. And worryingly, more than two-thirds (69%) also predict they will likely need to acquire further debt to deal with future financial pressures.
However, consumers aged 25–34 appear to have experienced the least impact from the cost of living crisis, with 64% saying that they don’t yet feel the need to cut back or miss any essential payments.
UK consumers fear getting into debt
With a looming recession, rising interest rates, and fewer people able to save money for a rainy day, many households have expressed concerns about falling into problem debt.
The report by the personal finance experts at NerdWallet UK reveals that almost three-quarters (74%) of consumers currently in debt fear becoming trapped by debt in the future.
Women were more likely to fear falling into problem debt than men. The report shows 60% of women admitted to debt concerns compared with just 41% of men.
Brean Horne, the personal finance expert at NerdWallet UK, said: “Borrowing allows us to pay for goods and services without having to cover the upfront cost ourselves. . It’s very common for consumers to have some form of debt – but it’s important to ensure that you can afford repayments before taking out any credit agreement. Borrowers who manage their repayments and pay off their debt on time are unlikely to run into any issues. However, shoppers purchasing more than they can reasonably afford may be putting themselves at risk, especially as the cost of living continues to rise.
“If you feel like your debt is piling up and becoming unmanageable, it’s important to seek help and take action immediately. There are many tried and tested ways to get your finances back on track, including prioritising or consolidating any outstanding debts, as well as speaking to your lenders to discuss your specific finances and realistic repayment options.
“Customers tempted to use different forms of borrowing should take note of all terms and conditions and make sure they understand how much they’ll be repaying and when.
“Calculating your overall debt can seem daunting, especially if you have fallen behind on your repayments. But understanding how much you need to repay can help you make a plan and take action to clear your debt.
“Once you know how much you currently owe, the next step is to make a budget to work out your monthly income and spending.
“You don’t have to struggle with debt alone. There are lots of resources and services to help you pay off what you owe. Contacting a free, independent debt charity or service will help you find the support and guidance you need to get your finances back on track. A debt adviser will be able to talk through your financial circumstances and help find the best way to deal with your debt.”