2.4 million households missed an essential payment in January

According to the Which? Consumer Insight Tracker nearly one in six renters missed an essential payment, and an estimated 2.4 million households missed or defaulted on at least one rent, mortgage, loan, credit card or bill in the month to 12 January.

Missed payments were particularly high among renters with 15.9% of those surveyed missing at least one rent, loan, credit card or bill payment between December 2023 and January 2024.

These findings are also supported by Rightmove’s most recent statistics, which show rents have hit an ‘affordability ceiling’, with renters paying near the top level of what they can afford every month.

6.8% of mortgage holders missed an essential payment, compared to just 2.8% of outright owners.

In total, 8.5% of households said they had missed a payment in the month to 12 January.

Most commonly missed were bills (5.1%) followed by loan or credit card payments (4.4%) and housing payments (2.7%).

Of those who missed a household bill payment, the most common bill type missed was an energy bill (56%), followed by council tax (36%), water (30%), phone (29%) and broadband and/or TV package (29%).

Which?’s report went on to find that six in ten households – 16.5 million households - had made at least one adjustment to cover essential spending.

Changes include cutting back on essentials, dipping into savings, selling possessions, or borrowing.

This is slightly higher than the levels seen in the previous four months (53% v 56%).

People told Which? they had lost their social life, were avoiding turning on the heating and cutting back on food to make ends meet.

What should you do if you’re struggling to pay your bills?

Struggling to afford bills or missing payments can be stressful.

Don’t ignore the problem - speak to your providers if you are struggling. Contact them as early as possible to explain the situation and see if they can offer you support. Some providers might write off debt, while others could move you on to lower tariffs, offer payment holidays, arrange a repayment plan, or freeze the interest on the debt.

Priority debts

It can cause you serious problems if you ignore priority debts – you could lose your home, have your gas or electricity cut off or lose belongings on hire purchase.

You need to work out what your priority debts are and deal with them first. Priority debts include:

• Rent arrears
• Mortgage arrears or secured loan arrears
• Council tax arrears
• Gas or electricity bills
• Phone or internet bills
• TV licence payments
• Court fines
• Overpaid tax credits
• Payments for good bought on hire purchase
• Unpaid income tax, national insurance or VAT
• Unpaid child maintenance

Non-priority debts

Once you have dealt with your priority debts, you should look at all your other debts. They’re classed as ‘non-priority’ because they cause less serious problems.

Non-priority debts include:

• Credit card or store card debt
• Catalogue debts
• Unsecured loans including payday loans
• Unpaid water bills – your water supply can’t be cut off
•  Overpayment of benefits – apart from tax credits
• Unpaid parking tickets – known as penalty charge notices or parking charge notices
• Money to family or friends

Even though they are deemed less serious, your creditors can still take you to court to get you to pay.

What should I do if I can’t afford to repay my debts?

If your outgoings regularly exceed your income and your debts are mounting, seek independent, free advice.

There are a few different solutions available to you. Find out more here.