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The study found that young adults classed as living in “financially vulnerable circumstances” has risen by 45% in the last year, and now comprises 1.9 million people. It explained that one in five of this younger group are on zero-hours contracts, are often hit by rising costs, or using buy-now-pay-later schemes or short-term credit to top up their incomes.
It also saw that the number of families in “crisis position”, where they rely on credit to be able to afford necessities, has grown by 11% in the past year to 3.9 million people.
Homeowners and renters were also found to be impacted by worsening finances, with those who are managing “higher-than-average long-term debts” has risen by 57% to 3.6 million people.
The use of food banks was also found to have risen, with half of adults in “financially vulnerable” circumstances saying they could not afford to eat a healthy, balanced diet.
Fair4All Finance explained that many financially vulnerable people are shut out of financial help, with one in five (22%) having been rejected for credit in the past year, increasing the risk that they will have to turn to illegal money lenders or loan sharks in search of support.
They urged the Labour government to establish a financial inclusion strategy to help those in the most difficult positions find assistance with their household funds.
“In an age where every penny counts for households and the public sector, the poverty premium is costing the country a staggering £2.8bn per year,” Porretta said.
“Everyday money worries are driving up absences from work and reducing productivity, creating an additional £6.2bn burden for UK employers which they can ill afford.
“The time has come for action to create a fully inclusive financial services system that works for everyone.”
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