And more than one in four low income households say they have already run out of financial slack. The sobering figures emerged in a report from financial services giant Legal & General. Millions of households are in the grip of the cost-of-living crunch amid a surge in energy, food and fuel bills.
But experts warn the situation will get even worse as inflation is predicted to soar from a 40-year high of more than nine percent to 12 percent in the autumn.
One of the main reasons is another jump in energy bills, with the price cap forecast to rocket from £1,971 a year to over £3,500 in October.
The L&G poll found 13 percent of those asked – equivalent to 6.9 million people – felt they would have “nothing left to cut back on” with any energy price increase.
That figure hit 28 percent among households with incomes of less than £20,000 a year.
Meanwhile, 69 percent are already being forced to make additional cutbacks on their household budgets.
And just under half fear being unable to keep up with rent or mortgage payments over the next 12 months.
It comes as the Bank of England is tipped to raise interest rates from 1.25 percent to 1.75 percent on Thursday.
If so, it would be the first time the Bank has upped rates by a full half a percent in one step since it was granted independence 25 years ago.
L&G CEO Nigel Wilson said: “Many households are currently facing very tough financial choices. For some, those choices seem impossible.”
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