One in every six UK households face serious financial difficulties and are cutting back on their spending by buying lower-quality food and cutting back on showers to make ends meet.
The Abrdn Financial Fairness Trust and researchers at the University of Bristol estimated that 16% of households, or 4.4 million, are in “serious financial difficulties” and a further 20% are “struggling” to get by.
The figures mean that more people now are struggling with their costs than at any point during the pandemic as inflation eats into disposable income.
Soaring inflation is hitting lower and middle-income families the hardest.
Most respondents are trying to tackle rising energy bills. Some are reducing the number of showers and baths they take and others are using the oven less.
Three fifths of respondents said they had avoided turning on the heating while a quarter (24%) said they heated only part of their home in efforts to cut costs.
Some 71% said they have reduced the quality of food they eat, over a third (36%) have sold or pawned possessions and 27% have cancelled or not renewed insurance policies.
“Times are tough for everyone, but it’s those on the lowest incomes who are particularly feeling the effects of rising prices,” said Mubin Haq, chief executive officer of the trust.
“Wages have largely stagnated and are no longer keeping pace with inflation; and social security is lower in real terms than it was over a decade ago.
Households earning more than £100,000 a year were the only group who did not report an increase in serious hardship.
Analysts predicted the energy price cap is on track to rise to £3,244 a year in October, when it is next adjusted, up from £1,971 a year.
More than a fifth of casual workers had stopped or reduced pension contributions. Single parents, social renters and households with children are being hit hardest.
“It’s particularly worrying that people are potentially storing up future financial problems for themselves,” said Sharon Collard, a professor at the University of Bristol.
There are also regional disparities as households in Wales, Scotland, and the north east of England reported higher levels of serious financial difficulty than the UK average.
Experts warned that government support measures — like the £150 council tax rebate announced in March — may not be reaching those who need it the most.
The survey found a similar proportion of households in serious financial difficulties reported receiving the rebate as those feeling financially secure, at 40% compared to 41%.
Rocio Concha, Which? director of policy and advocacy, said: "The soaring cost of living is forcing many consumers to take increasingly drastic actions just to make ends meet.
"These figures reflect recent Which? research that found consumer confidence is at its lowest point since the start of the pandemic, with six in 10 telling us their household had to make an adjustment — such as cutting back on essentials or dipping into savings — to cover essential spending in the last month.
"The government and businesses must ensure that targeted support reaches the ever-growing number of consumers struggling to make ends meet.”