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estimated four million people England And wales According to the calculations, they are stuck in a negative budget, in which the cost of essential goods exceeds their income. citizens advice,
The charity also estimated that in 2024/25, 320,000 people were just £50 from a negative budget.
The charity said that figure could rise to 580,000 in 2025/26 as the cost of living continues to rise, meaning more than half a million people could be at risk of unexpected shocks that would put them in danger.
The calculations were done using data from Citizens Advice subscribers, using Office for National Statistics (ONS) data to help make estimates for England and Wales.
Citizens Advice said the majority of people it helps tackle debt have negative budgets and this group of people have an average debt of £9,963 per household.
The charity said it wanted to see targeted utility bill support for people struggling with rising prices.
Yvonne Parkes, a debt team manager at Citizens Advice, South Gloucestershire, said: “I have seen it again and again – missing a bill leads to arrears, enforcement, deductions or credit damage. Tension And poor mental health impairs one’s ability to manage finances or find work. People They become trapped in a cycle of crisis, repeatedly requiring emergency assistance such as food banks, fuel vouchers or assistance with housing payments.
“Debt resolution has become not a solution, but a sticking plaster. Now whenever I help someone, I know there’s a good chance I’ll see them a year later deeper in debt, through no fault of theirs.”
Some groups in society are more vulnerable to being stuck in a negative budget than others, such as private renters and households with children, the charity said.
Mike Ambury, retirement savings director at Standard Life, said: “These findings from Citizens Advice paint a clear picture of the financial strain facing many households. Our own research echoes this reality – almost a quarter (23%) of people are finding it difficult to live on their current income, rising to 27% for women and 28% for both Gen X and Gen Z. The pressure is even more acute for those who are not in work. (48%), people with disabilities (36%), and those earning less than £30,000 (38%).
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“It can be difficult to think about the future when the present feels so uncertain. While long-term savings may not be a priority for everyone right now, it’s important to keep the conversation going and ensure that support is available to those who need it most, and that no one is left behind when it comes to preparing for later life. Everyone deserves the chance to build a secure future.”