Cost of living analysis - November 2022

Background

Assessing the impact of recent increases in the cost of living is a difficult task. Datasets which will give a good indication of the consequences – such as fuel poverty estimates – are generally published with a significant delay meaning that there is little information available to understand the here and now.

The Office for National Statistics (ONS) have posted a statistical bulletin assessing the impact of the cost-of-living crisis on different population groups nationally. The bulletin focusses on those people who are having difficulty affording their energy, rent, or mortgage payments and covers the period from 22 June to 11 September 2022. Results are taken from the Opinions and Lifestyle Survey (OPN). The full ONS report can be viewed here.

This analysis will apply the ONS’ findings from the OPN to the Somerset population. There are many assumptions and generalisations behind these calculations, and this is not intended to provide any exact figures for those impacted in Somerset, but to give an indication of which population groups within Somerset may be struggling.

Overview

Based on the responses to the OPN nationally, an estimated 216,000 adults (45%) in Somerset might be finding it difficult to afford their energy bills, whilst 144,000 might be finding it difficult to afford rent or mortgage payments. Again based on national rates, 24,000 adults in Somerset might be behind on energy bill payments, with around 14,500 behind on rent or mortgage payments.

Disability

The survey found that those with a disability were more likely to report difficulty in paying their bills. We can estimate that in Somerset there might be 58,500 disabled adults who are finding it difficult to afford their energy bills, with around 38,500 struggling with mortgage or rent payments. 9,500 disabled adults in Somerset may be behind on energy payments and 5,500 behind on rent or mortgage payments.

Difficulty affording energy bills – by disability status.

Age groups

Working age adults are more likely to have reported difficulties with paying bills, than younger or older age groups. This is likely related to older adults (65+) being more likely to own their house outright, and the youngest age group (16-24) being less likely to have responsibility for paying household bills.

Amongst those aged between 25 – 64, around 1 in 3 adults report difficulty affording their rent or mortgage payments. In Somerset, this would be around 94,500 working aged adults. For those aged 65 and over, it is closer to 1 in 4 who are struggling to meet mortgage/rent payments, giving a possible figure of 38,500 people in Somerset. The figure for those aged 16-24 who might be struggling to afford rent or mortgage payments would be around 12,000, or approximately 1 in 5.

Difficulty affording rent or mortgage payments – by age group.

Housing tenure

Those who are in rented accommodation are more likely to be having difficulty affording both their bills and their rental payments than those who either own their home outright or have a mortgage. Around 60% of renters reported difficulty in paying their energy bills. In Somerset this would equate to around 92,500 persons. Around 4 in 10 renters were finding it difficult to afford their rent (around 60,000 persons in Somerset), and 1 in 10 reported being behind on their energy bills (around 17,000 persons in Somerset). The figures for those with a mortgage might be around 52,500 struggling to afford energy bills and 29,000 struggling to afford mortgage payments, with 4,000 behind on energy bills.

Those who own their home outright are least likely to report difficulties resulting from increasing costs of living, although this is also the most common tenancy type in Somerset so still represents a large number of people. Amongst this group, around 71,000 might be finding it difficult to afford energy bills, and 2,000 people in Somerset might be behind on their energy bills.

Difficulty affording energy bills – by housing tenure type.

Deprivation

Respondents from lower income groups, and those who live in areas of higher deprivation are more likely to be experiencing difficulties related to the increasing cost of living. Over half of respondents from areas in the most deprived 20% areas were finding it difficult to afford their energy bills. Somerset has relatively few areas in either the 20% least or 20% most deprived areas, meaning that the majority of those finding it difficult to afford their energy bills in Somerset will likely live in areas of moderate deprivation.

Difficulty affording energy bills – by deprivation quintile.