BRITS are struggling with mortgage costs and unable to save, a worrying survey has found, in “a huge red flag about the health of household finances”.
A survey released by the Office for National Statistics today has revealed just how people are struggling in the UK with many finding it difficult to pay their mortgages or save cash.
Among adults currently paying rent or mortgage payments, around 3 in 10 (31%) reported finding it very or somewhat difficult to afford these payments in the period of 1 October 2025 to 4 January 2026.
Brits were also asked if in view of the general economic situation, do they think they will be able to save any money in the next 12 months. A total of 46% said yes, while 52% of 16 to 29-year-olds said yes. A total of 33% said they won’t be able to save.
In the period 1 October 2025 to 4 January 2026, 62% of adults reported that their cost of living had increased compared with a month ago.
Among those who reported that their cost of living had increased compared with a month ago, the most commonly reported reasons were increases in the price of food shopping (94%), gas or electricity bills (68%) and the price of fuel (46%).
This comes as data this week showed individual insolvencies are up by 15% in December.
Experts warned that the findings were “a huge red flag about the health of household finances”.
Huge red flag
Omer Mehmet, Managing Director at Welling-based Trinity Finance, said: “The fact that almost a third of people are finding it difficult to cover their rent or mortgage shows the immense pressure many households are under. Higher interest rates, high inflation and the cost of living crisis are decimating finances.
“The cost of food in particular is literally eating away at people’s incomes. The Bank of England should take note of this worrying data when they meet to decide interest rates early next month. It is a huge red flag about the health of household finances.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said households are struggling.
She added: “The cost of living crisis is far from over. This data shows that a significant percentage of people are spent out and struggling to make ends meet let alone save for their future. These are hard times for so many households.”
The weekly food shop feels like an Everest
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, said even the weekly shop was too much for some people as inflation bites.
He continued: “Interest rates may have nudged down but the cost of living crisis continues and the toll it is taking on so many people is immense. To many, the weekly food shop feels like an Everest.
“The psychological impact of this financial pressure should not be underestimated. Let’s hope Andrew Bailey and his colleagues on the Monetary Policy Committee read this report before they next meet.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said this has become the new normal.
He added: “The cost of living crisis is now baked in. When inflation falls, prices don’t. They just don’t increase as quickly. The previous rises are now the norm.
“With mortgage rates still significantly higher than the last decade, and confidence cracking in industry, retail and the housing market, we are now seeing families who were hanging on by a thread forced to let go. The economy needs a shot in the arm and this government is still managing it like a stagnant business.”
The consequences ripple fast
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said there could be dangerous consequences.
She continued: “This data shows the cost of living crisis is no longer a squeeze, it is a strain that families are actively buckling under. When nearly one in three renters or mortgage holders say payments are hard to afford, that tells you this is about core bills, not lifestyle choices.
“Food and energy are unavoidable, so when those rise, households have nowhere left to cut. If people cannot afford their mortgages or rent, the consequences ripple fast. We see rising arrears, higher stress and poorer mental health, and eventually forced sales or evictions.
“At the same time, families pull back on spending, which slows the wider economy, hits small businesses first, and risks turning a cost of living crisis into a growth problem.”
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, said “the UK is caught in a classic debt trap”.
She added: “What the data reveals is that this is no longer a ‘tight month’ problem, but a persistent affordability problem. The consequences are straightforward and unpleasant. When households cannot afford housing costs, you see arrears, concession requests, forced cutbacks, and at the margin repossession risk.
“Even before it gets that far, discretionary spend is the shock absorber, which feeds directly into weaker demand across retail, hospitality and services. This is how a cost of living problem becomes a broader growth problem: consumption slows, business confidence weakens, and the state is asked to do more at precisely the point its own finances are least flexible.
“As for what caused it, the survey is capturing the lived outcome of years of purchasing power erosion meeting higher debt servicing costs. The UK is caught in a classic debt trap.”
Classic debt trap
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said many are choosing to spend money rather than save.
She continued: “The cost of living crisis is a pandemic that is not going away any time soon. The fact that people can’t save should be the least of their worries if they can’t continue to make their current commitments.
“Unfortunately, we are also in a time where people find paying for non-essential items more important than putting money away for a rainy day. For example, upgraded iPhones, Sky subscriptions and TikTok shops.”
Photo by Carolina Daltoe on Unsplash.
