24 October 2023
- 3,500 calls over the past year about finding extra financial support
- 9,000 calls about dealing with debt or money problems
New call log data from MoneyHelper, gathered via a Freedom of Information request by wealth manager, Quilter, shows calls about finding extra financial support spiked by over 175% year-on-year directly following Liz Truss’ mini budget.
MoneyHelper is a consumer-facing service, providing free and impartial money and pensions guidance for people across the UK.
According to the data, 802 calls were made to MoneyHelper between October 2021 and March 2022 compared to 2,214 over the same period a year later in the aftermath of the mini budget at the end of September 2022.
In total 3,660 people have contacted MoneyHelper since October last year seeking help with finding extra financial support amid the cost-of-living crisis.
On 23 September 2022, the then prime minister, Liz Truss, and former chancellor, Kwasi Kwarteng, delivered a mini-Budget against a background of high and rising inflation and low economic growth.
The mini-budget included £45bn of unfunded tax cuts and resulted in days of turmoil in the markets, a fall in the value of the pound and rises in the cost of UK government borrowing and mortgage rates. The ensuing problems ultimately led to both Kwarteng and Truss losing their jobs.
Over the past year, while not all directly related to the mini budget, there has been around a £510 increase in the average monthly cost of a £250k mortgage, a £15,000 decrease in the average UK house price. Worryingly, there has also been £16.9bn increase in value of mortgage balances with arrears.
Elsewhere the data, which runs to October 2023, shows that since October 2022, 9,035 people have called MoneyHelper looking for help with dealing with debt or money problems. And 254 people have been in touch about coping with a job loss.
Emma Prince, financial adviser at Quilter says:
“This time last year, the news was awash with headlines about skyrocketing mortgage rates and this was naturally scaring and shocking people. It is therefore not surprising that people looked to free services like MoneyHelper for guidance on what they could do to help alleviate a current or future squeeze on their finances.
“While, in reality, the headline mortgage rates have only marginally come down since then the reality of higher rates has had time to settle in. Problematically, for many on fixed rate deals the reality of how much more mortgage bills will be has not taken effect and therefore there will still be a significant number of people relatively untouched by the events of the last year. When these people come to remortgage the true scale of the interest rates will have a devastating impact on their monthly finances and we may see a further surge of calls to services like MoneyHelper for assistance.
“For those in the process of buying or worried about their finances it may be useful to look into getting financial advice which can look at your finances holistically and make sure that you are making the most of your money and can get the best possible outcome in light of this still precarious economic landscape.”
