According to a recent study tracking the impact of the cost-of-living crisis, nearly 2.5 million households in the UK are classified as being at "high risk" of financial vulnerability or other

difficulties and may require assistance to meet their expenses. The analysis is based on the number of households registered with the Vulnerability Registration Service (VRS), which alerts companies to financial problems affecting their clients, and extrapolated to the country's population.

The study, conducted by the VRS and data firm Outra, also revealed that an additional 6.3 million households are at an "elevated" risk of vulnerability, suggesting they may need some form of support to pay their bills. In total, there are an estimated 28 million households in the United Kingdom as of 2022.

The UK is currently experiencing the most significant strain on living standards since the 1950s, as wages struggle to keep up with rising inflation. This situation is expected to worsen as mortgage and rent costs increase due to higher borrowing expenses.

Despite these challenges, most consumers have managed to sustain their spending levels, with savings accumulated during the COVID-19 pandemic surpassing 2019 levels, and the unemployment rate nearing its lowest point since 1974, as indicated by corporate results and official data. However, recent official retail figures have revealed the impact of inflation on consumers, showing that although spending in value terms was 17% higher in May compared to February 2020, volumes were down by 0.8%. Many customers have resorted to purchasing the cheapest ranges offered by supermarkets.

The study by VRS and Outra highlighted that the north west and north east of England are experiencing the greatest pressure, with four out of ten homes in these regions deemed to be at high or elevated risk of vulnerability.

The VRS register serves as a means for landlords, banks, and utilities to be informed of households facing financial struggles. It defines vulnerability as difficulties with finances, health issues, or bereavement that may escalate out of control. Currently, around 400,000 households are registered with the service.

To address the issue, Finance Minister Jeremy Hunt recently held discussions with regulators on preventing profiteering by companies. A new Consumer Duty will come into effect on July 31, establishing new consumer protection standards, particularly for those considered vulnerable. The Financial Conduct Authority, the regulatory body responsible for introducing the Consumer Duty, reported last month that the number of people facing challenges in meeting bills and credit repayments had risen by 3.1 million since May 2022, reaching a total of 10.9 million individuals.