We all know that it can be difficult to make ends meet from time to time, yet thanks to rising inflation and the increasing cost of everything from food to heating bills, those on low incomes can face particular difficulty - so much so that many are forced to make worrying cutbacks.
That's according to the latest Financial Wellness Index, conducted by Bristol University and commissioned by Momentum UK. The results show that an estimated 4 million people have had to cut back on central heating in the last year just to get by, while an additional 6 million - equating to 12% of the UK's population - have had to reduce their food spend.
Unfortunately, this may not be a pattern that changes anytime soon: the study predicts that, with low wage growth and rising inflation reducing disposable incomes even further, low earners could be forced to make even more cutbacks in the coming months to make ends meet.
It isn't only these people who are feeling the pinch, either, with many others having to forego lifestyle expenses because of a lack of money. For example, 16% of respondents (equating to more than 8 million people) couldn't afford a holiday in the last 12 months, while 15% (more than 7 million) cut back on socialising.
Some aren't only cutting back - many are actually having to raise money through borrowing from friends and family (8%, equating to around 4 million people) or selling possessions (6%/3 million), while an additional 1 million have increased the amount borrowed on a credit card or overdraft.
Overall, the UK's Financial Wellness score stands at 69 out of 100, which means the typical household is "financially exposed": they may have a relatively comfortable standard of living, but they'd be susceptible to financial harm in the event of an unexpected economic shock (such as job loss or a fall in house price). However, one in 40 households are in the "financially distressed" group, whereby they're likely to face poverty and deprivation in their day-to-day lives, which means far more needs to be done to shore up the nation's finances.
Dominic Baliszewski, Momentum UK's director of Consumer Strategy, has devised the following tips to help people better manage their finances, which will hopefully mean fewer will be financially distressed.
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