Cost of living crisis driving a surge in demand for money advice

Demand for financial advice and information has reached levels not seen since the first weeks of the pandemic as people try to cope with the cost of living crisis.

Citizens Advice Scotland (CAS) reports that its ‘Struggling to Pay Your Energy Bills’ page is at its busiest since April 2020.

And the charity’s monthly data report for February 2022 reveals demand for fuel debt advice is twice as high as before the pandemic. Pages advising on benefits, council tax, rent and bills have also seen increased visits.

It comes as new figures from the Office for National Statistics (ONS) found nine in 10 people had seen a rise in their cost of living even before the energy price cap was lifted and national insurance increased at the start of April.

“The cost of living crisis is squeezing household budgets to breaking point across the country”, said CAS financial health spokesperson Myles Fitt. 

“People are faced with a perfect storm of soaring prices and flat or falling incomes, and that perfect storm risks sweeping tens of thousands of people across Scotland into poverty, debt and destitution.”

The data comes as it was revealed the government’s cost of living working group had not met for six months.

Experts warn that Brits face the sharpest decline in living standards since the 1950s. Inflation is expected to hit 8 per cent this spring, but the national living wage – the minimum wage for over-23s – rose by just 6.6 per cent: a real-terms cut.

Universal Credit payments were already cut by £20 per week in October, in a move condemned by the United Nations’ poverty envoy. In April, the chancellor raised payments by just 3.1 per cent – a real-terms cut of 5 per cent.

At the same time, the energy price cap was increased by 54 per cent, costing families an extra £700 per year.

The ONS survey also found more than a third of tenants said their rent had increased in the past six months.

“What our latest data report shows is that even before the big rises in energy bills in April and inflation continuing to grow, people were already worried about dealing with the impact of the rising cost of living”, said Fitt.

 “We want to see more from policymakers to ease this crisis for people, but in the short term we would recommend anyone struggling with the cost of living to seek advice from the Citizens Advice network.  

“You can get advice from a local CAB, who offer free, impartial and confidential advice. Our advisers unlocked £147million for people last year through things like social security payments and employment entitlements. It’s a wraparound service too, so advisers can check lots of different things for you, and it’s all done with empathy and understanding. We don’t judge, we just help.”