The cost of living has been increasing across the UK since early 2021 and, in April 2022, inflation reached its highest recorded level.

The Office of National Statistics (ONS) estimates it is now higher than at any time since around 1982, affecting the affordability of goods and services for households.

Consumer prices, as measured by the Consumer Prices Index (CPI), were 9% higher in April 2022 than a year before.

To combat this, Chancellor Rishi Sunak has outlined a £37bn package of measures to support people struggling with the cost of living.

All households will receive a £400 discount on energy bills from September 2022 while eight million of the lowest income families will also get a one-off payment of £650 (paid in two instalments in summer and autumn).

PayPlan customers are already feeling the impact of increasing living costs

We’ve seen a continuation in people who are self-employed and renting falling into debt, while we are also experiencing a new demographic in clients with a high household income.

This is the first time we’ve experienced an increase in clients from households with incomes of £60,000 or more since the 2008 financial crisis, with 13% of new customers falling into this bracket.

Customers with costs above their income is also growing – last month this issue accounted for 20% of those who contacted us for help.

Our CEO, Rachel Duffey, said: “The fear is that with the cost of living continuing to rise, reaching for a credit card or applying for a loan is fast becoming the go-to option for many people, but we have found that people are willing to talk about their debt problems much earlier in the journey.

“We have also found that people are cutting down on expenditures such as tv licences, pension contributions and key insurances in response to the rising cost of living.”

What PayPlan is doing to support those who are struggling to pay increasing bills 

The worry and stress of keeping up with changing costs is having a very real impact on mental wellbeing too.

With over 30 years’ experience as one of the leading providers of free debt advice, we’ve found during this time that there’s often a strong link between financial wellbeing and mental wellbeing – and dealing with one can often help the other.

We’re doing more to help those who may be experiencing mental health-related issues because of their financial stress – and that’s why we work closely with a wide range of support organisations to ensure clients get the tailored help they need, when they need it.

Whatever their situation, it’s important to us that our clients feel supported every step of the way, not just with their debts, but their bigger wellbeing picture too.

Some of the charities and organisations we partner with to provide holistic support include Bipolar UK and Samaritans [for mental health support], GamCare [for support with gambling-related financial harm], Refuge and Broxtowe Women’s Project [for support with domestic abuse] and many more.

People needing help with their debts can get in touch with us through one of our partner organisations, through our website or via our freephone on 0800 316 1833 .