Are you “burned out and desperate” or “rich and apathetic”? Britain’s population is now deeply divided into six distinct new groups based on how people are coping with the cost of living crisis, researchers say.
The groups were assembled based on a survey of 4,000 adults by Which? magazine. He revealed that a cohort of ‘nearly 8 million people have been left hanging on the financial razor’s edge’ after being shielded from the worst of the squeeze on household finances so far, but are now on the brink serious difficulties.
This group, labeled ‘anxious and at risk’, tends to be from larger households with children at home who have barely managed to stay afloat using credit, the consumer campaign organization said. .
However, unlike the 9.2 million members of the exhausted and desperate group – who often skip meals and one of whom said “I feel like I exist instead of living” – the anxious and at risk are far more likely to have borrowed money to maintain a basic standard of living than to have cut back on basic necessities, such as food and energy.
This means that despite food price inflation falling to 14.9% in the four weeks to July 9 from 16.5% a month earlier, they are about to be hit by high interest rates that were expected to stay higher this week for longer.
Six in 10 of the anxious and at-risk group have increased their debt in the past six months – the highest of any group. They are also more than twice as likely as the rest of the UK population to have used buy it now and pay later schemes and are the most vulnerable to the 13 successive UK interest rate hikes since December 2021 with the Bank of England base rate. now at 5%.
“With interest rates continuing to rise, it’s only a matter of time before they run into serious trouble,” said Rocio Concha, director of policy and advocacy at Which?. “The government must help those who need it most by tightening buy it now regulations, pay later to end unaffordable loans and ensuring that essential businesses do everything in their power to alleviate pressures on household finances.”
The profile of the anxious and at-risk group is that they typically earn between £20,000 and £45,000, are aged between 18 and 34, have children, work and rent their homes.
Half of them said they worry that they or other members of their household are not eating healthy enough, have increased anxiety and become increasingly distant from their friends.