Survey on Income and Living Conditions (SILC): Enforced Deprivation 2023

Household Arrears

Households were asked if they had arrears, i.e. failed to make a payment in time during the 12 months prior to the date of interview due to financial difficulties. These payments included mortgage or rental payments; utility bills; hire purchase instalments, or other loan payments. The answer categories were ‘yes, once’; ‘yes, twice or more’; ‘no’.

Care should be taken when interpreting mortgage arrears data from the SILC survey. In SILC a household is only considered to be owned with a mortgage if the purpose of the mortgage was to purchase or majorly refurbish the main dwelling. If a SILC household has one mortgage on the primary dwelling and if the main purpose for taking out the mortgage was not for purchase or major refurbishment of the main dwelling, e.g. to finance a business activity, then the household for SILC purposes is classified as ‘owned-outright’.

In 2023, of the 59.1% of households making mortgage or rent payments, 2.1% failed once and a further 5.3% failed twice or more to make a payment on time in the past 12 months. See figure 5.1 and table 5.1.

The data collection phase of the SILC is conducted during the first two quarters of the calendar year. Statistics published by the Commission for Regulation of Utilities (PDF 1,147KB) show that the peak in electricity bill arrears for domestic customers occurred in Q1, 2022 (i.e. during SILC 2022 data collection).

In 2023, of the 99.3% households indicating they pay utility bills, 7.3%, had arrears on utility bills, with 5.4% failing to make a payment on time twice or more. In 2022, almost one in ten (9.2%) households had arrears on utility bills. The comparable rate for 2021 was 6.8%. See figure 5.2 and table 5.2.

Of the 31.8% of households that indicated they had hire purchase instalments or other loan payments, 7.9% had arrears, with 5.7% failing to make a payment on time on two or more occasions in the past 12 months. See figure 5.3 and table 5.3.

One in five single-adult households with children had arrears on mortgage or rental payments

Analysis by household composition shows that single-adult households with children were the most likely to have missed at least one payment in the past 12 months, while households comprised of two adults with at least one aged 65 or over were the least likely. Of those making the relevant payments, 14.4% of single-adult households with children had arrears on mortgage or rental payments; 16.2% had arrears on utility bills; and 19.0% had hire purchase instalments or other loan payment arrears. See Figure 5.4.

Rented household more likely to be in arrears                                  

Analysis of arrears on mortgage or rental payments by tenure status, shows that 2.7% of owner-occupied households with an outstanding mortgage failed to make one or more payments on time in the past 12 months due to financial difficulties. Of households that pay rent more than one in ten (12.0%) failed to make one or more rent payments on time. Rented household were also more likely to have arrears on utility bills with 15.2% of these households failing to make one or more utility bill payments on time in the past 12 months compared with 3.6% of owner-occupied households. See figure 5.5.

Households living in enforced deprivation more likely to be in arrears

Households living in enforced deprivation were more likely to have arrears on utility bills with 30.2% of these households failing to pay one or more utility bill on time in the past 12 months due to financial difficulties. The comparable rate for households not experiencing deprivation was 2.5%. One in four (24.6%) of households living in enforced deprivation that have a mortgage or live in rented accommodation (other than rent-free accommodation) failed to make one or more mortgage or rent payments on time in the past 12 months due to financial difficulties. The comparable rate for those not living in enforced deprivation was 2.3%. See figure 5.6.

Finances at the end of the month

The respondent to the SILC household questionnaire is asked ‘At the end of a typical month, do you’;

1. Have money to put aside/save
2. Need to draw money from savings
3. Need to borrow money
4. Don't have money to put aside/save, nor need to draw on savings/borrow

In 2023 over half (53.4%) of households could put money aside at the end of a typical month. Approximately one in twenty (5.6%) needed to draw money from savings and a smaller percentage (3.4%) needed to borrow money. The proportion of households that could put money aside rose by 0.9 percentage points from the 2022 rate (52.5%) and the proportion that needed to borrow money was 1.2 percentage points higher than the 2022 rate (2.2%). See figure 5.7.

Analysis of those households that needed to borrow money at the end of a typical month shows that approximately one in thirteen (7.8%) rented or rent-free households need to borrow money at the end of a typical month (3.1 percentage points higher than the 2022 rate of 4.7%). In comparison 1.4% of owner-occupied households needed to borrow money at the end of a typical month (up slightly on the 2022 rate of 1.0%). See figure 5.8.